a
=11.8%
b
Real return = ((1+nominal return)/(1+inflation rate)-1)*100 |
Real return=((1+0.118)/(1+0.031)-1)*100 |
Real return = 8.44 |
Problem 10-5 Nominal versus Real Returns [LO 2] Consider the following information on different asset classes...
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...
Consider the following information on large-company stocks for a period of years. Series Arithmetic Mean Large-company stocks 15.1 % Inflation 4.9 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 15.1 % b. What was the arithmetic average annual return on large-company stocks in real terms? (Do not round intermediate calculations and enter your...
Consider the following information on large-company stocks for a period of years. Arithmetic Mean 12.9% 3.4 Large-company stocks Inflation 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.) 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...
Consider the following information on large-company stocks for a period of years. Arithmetic Mean Large-company stocks 13.9 % Inflation 3.3 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.) 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...
Use the following table of returns from 1926 through 2017: Average return 12.1% 16.5 Series Large stocks Small stocks Long-term corporate bonds Long-term government bonds U.S. Treasury bills Inflation 6.4 6.0 3.4 3.0 a. Determine the return on a portfolio that was equally invested in large-company stocks and long-term corporate bonds. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What was the return on a portfolio that was...
Use the following table of returns from 1926 through 2017: Series Large stocks Small stocks Long-term corporate bonds Long-term government bonds U.S. Treasury bills Inflation Average return 12.1% 16.5 6.4 6.0 3.4 3.0 a. Determine the return on a portfolio that was equally invested in large-company stocks and long-term corporate bonds. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What was the return on a portfolio that was...
Problem 10-17 Return Distributions [LO 3] Consider the following table for the total annual returns for a given period of time. Series Average return Standard Deviation Large-company stocks 11.7 % 20.6 % Small-company stocks 16.4 33.0 Long-term corporate bonds 6.1 8.8 Long-term government bonds 6.1 9.4 Intermediate-term government bonds 5.6 5.7 U.S. Treasury bills 3.8 3.1 Inflation 3.1 4.2 What range of returns would you expect to see 95 percent of the time for long-term corporate bonds? (A negative answer...
Saved Assume that the historical return on large-company stocks is a predictor of the future returns. What return would you estimate for large-company stocks over the next year? The next 10 years? 20 years? 40 years? Refer to Table 12.4 (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) 1 year 10 years 20 years 40 years TABLE 12.4 Geometric versus Arithmetic Average Returns: 1926-2016 Average Return Standard Deviation Geometric...
Consider the following table for different assets for 1926 through 2017. 8.3 Series Large-company stocks Small-company stocks Long-term corporate bonds Long-term government bonds Intermediate-term government bonds U.S. Treasury bills Inflation Average return Standard Deviation 12.1% 19.8% 16.5 31.7 6.4 6.0 5.2 5.6 3.4 3.0 9.9 3.1 40 a. What range of returns would you expect to see 68 percent of the time for large- company stocks? (A negative answer should be indicated by a minus sign. Enter your answers from...
Consider the following table for different assets for 1926 through 2017 Average return Standard Deviation 12.1 % Series Large-company stocks Small-company stocks Long-term corporate bonds Long-term government bonds Intermediate-term government 19.8% 16.5 31.7 6.4 8.3 6.0 9.9 5.2 5.6 bonds 3.4 U.S. Treasury bills Inflation 3.1 3.0 4.0 a. What range of returns would you expect to see 68 percent of the time for long-term corporate bonds? (A negative answer should be indicated by a minus sign. Enter your answers...