Question

Consider the following information on large company stocks for a period of years. Large-company stocks Inflation Arithmetic Mean 15.58 3.6 a. What was the arithmetic average annual return on large-company stocks In nominal terms? (Do not round Intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g.. 32.16.) Nominal return b. What was the arithmetic average annual return on large-company stocks in real terms? (Do not round Intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Real return 0 %

Answer 1

a) Nominal return 15.50% b) Real return 11.90% =15.5%-3.6%

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