You've observed the following returns on Staverosky Corporation's stock over the past five years: -25.5 percent, 14.0 percent, 31.0 percent, 2.5 percent, and 21.5 percent. The average inflation rate over this period was 3.25 percent and the average T-bill rate over the period was 4.3 percent.
(a) What was the average real return on the stock?
(b) What was the average nominal risk premium on the stock?