QuizChap10

# QuizChap10 - Homework Manager Corporate Finance FIN301-004...

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Question 1: Score 0/1 Your response Correct response Calculating Real Returns and Risk Premiums You've observed the following returns on Hacker Corporation's stock over the past five years: 36 percent, -9 percent, 1 percent, 7 percent, and 24 percent. Suppose the average inflation rate over this time period was 3.7 percent and the average T-bill rate was 5.65 percent. The average real return on Hacker Corporation's stock was 0 (0%) percent and the average nominal risk premium on Hacker Corporation's stock was 0 (0%) percent. (Input answers as a percent rounded to 2 decimal places, without the percent sign.) Calculating Real Returns and Risk Premiums You've observed the following returns on Hacker Corporation's stock over the past five years: 36 percent, 1 percent, 7 percent, and 24 percent. Suppose the average inflation rate over this time peri percent and the average T-bill rate was 5.65 percent. The average real return on Hacker Corporation's 7.81 with a tolerance of ± 1.0% percent and the average nominal risk premium Corporation's stock was 6.15 with a tolerance of ± 1.0% percent. (Input answers as rounded to 2 decimal places, without the percent sign.) Total grade: 0.0×1/2 + 0.0×1/2 = 0% + 0% Feedback: (a) To find the average return, we sum all the returns and divide by the number of returns, so: Arithmetic average return = ((0.36) +(-0.09) + (0.01) + (0.07) + (0.24))/5

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QuizChap10 - Homework Manager Corporate Finance FIN301-004...

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