Calculate the Nominal Return, Real Return, and Risk Premium for the Following

Essay

Calculate the nominal return, real return, and risk premium for the following common stock investment:
$$\begin{array} { | c | c | } \hline \text { Purchase price } & \$ 60.00 \text { per share } \\\hline \text { Dividend } & \$ 3.50 \text { per year } \\\hline \text { Sales price } & \$ 73.00 \text { per share } \\\hline \text { Treasury bill yield } & 8.5 \% \\\hline \text { Inflation rate } & 7.5 \% \\\hline\end{array}$$