Your business manager forwards the following information to you. Your businesses earned a real rate of...
Your business manager forwards the following information to you. Your businesses earned a real rate of return of 3.6% last year and inflation for the same period was 1.7%. What was your nominal rate of return? (Note: nominal rates of return can be positive or negative.) (Use the exact method rather than the approximation method here.) (Round to 100th of a percent and enter as a percentage, e.g. 12.34% as 12.34.)
Homework Answers
Ans 5.36
| (1 + Nominal Return) = | ( 1 + Real Rate) * (1 + Inflation Rate) |
| (1 + Nominal Return) = | ( 1 + 3.6%) * ( 1 + 1.7%) |
| (1 + Nominal Return) = | 1.053612 |
| Nominal Return = | 5.36% |
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