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We know that during the last 10 years, the average historical return on a market...

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Finance

We know that during the last 10 years, the average historical return on a market index is 12%. We also know that the average inflation rate and average risk-free rate over the last 10 years are 2% and 5%, respectively. What is the real risk premium using the exact Fisher equation?

Select one:

a. 2.94%

b. 6.86%

c. 7.00%

d. 9.80%

e. 10.00%

Given the following share price history, calculate the standard deviation of the returns on this stock.

Year

Share price

1

$35

2

$30

3

$39

4

$42

5

$45

Select one:

a. 0.18%

b. 5.89%

c. 18.08%

d. 3.27%

e. 1.81%

What is the geometric average return of a stock with the following share price history?

Year

Share price

1

$35

2

$30

3

$39

4

$42

5

$45

Select one:

a. 7.95%

b. 7.64%

c. 7.14%

d. 6.84%

e. 6.48%

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