Suppose that the real rate of return is 3% and the inflation rate is 5%, what rate of return would expect on the investment using the exact fisher equation? (Enter percentages as decimals and round to 4 decimals)
(1+nominal interest rate) = (1+real rate) * (1+inflation rate)
=>
nominal interest rate = (1+0.03) * (1+0.05) - 1
= 8.15%
= 0.0815
Suppose that the real rate of return is 3% and the inflation rate is 5%, what...
Question 3: Suppose the real rate is 1.88 percent and the inflation rate is 0.89 percent. What rate would you expect to earn on a Treasury bill? Use exact formula and answer in percent to two decimals.
1.Suppose the nominal rate is 15.62% and the inflation rate is 2.37%. What is the real rate? Use the Fisher Equation to get the answer.Note: Convert your answer to percentage and round off to two decimal points. Do not enter % in the answer box. 2.ABC, Inc., has a beta of 1.19. The risk-free rate is 2.91% and the market risk premium is 7.89%. What is the required rate of return on ABC's stock?Note: Convert your answer to percentage and...
Suppose the real interest rate is 3% and expected inflation is 3%. What is the nominal interest rate?nominal interest rate: = _______ %All else equal, if inflation decreases by 0 %, what will happen to the nominal interest rate?The real interest rate will decrease by 0 %.The nominal interest rate will decrease by 0 %.The nominal interest rate will increase by 0 %.The real interest rate will increase by 0 %.What do economists call the relationship between the nominal interest...
Suppose the real rate is 7.5 percent and the inflation rate is 3 percent. What rate would you expect to see on a Treasury bill?
Suppose the real rate is 3.5 percent and the inflation rate is 5.1 percent. What rate would you expect to see on a Treasury bill? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. (e.g., 32.16).)
Note the return series below and answer the following questions 1. What is the average nominal return earned on large company stocks? (Enter percentages as decimals and round to 4 decimal places) 2. What is the average real return earned on large company stocks? (Enter percentages as decimals and round to 4 decimal places) 3. What is the average risk premium earned on large company stocks? (Enter percentages as decimals and round to 4 decimal places) 4. What is the...
Suppose the real rate is 9 percent and the inflation rate is 1.4 percent. What rate would you expect to see on a Treasury bill?
Assume the real rate of return is 1.06% and the inflation rate is 3.29%. Find the nominal rate of return using the exact formula. Answer Format: Percentage Round to: -2 decimal places (Example: 0%, % sign required. Will accept decimal format rounded to 0 decimal places (ex: 0))
11. Inflation and Nominal Returns Suppose the real rate is 2.25 percent and the inflation rate is 3.2 percent. What rate would you expect to see on a Treasury bill?
Suppose the real rate is 5.5 percent and the inflation rate is 2 percent. What rate would you expect to see on a Treasury bill?Multiple Choice:7.61%8.75%6.47%8.37%6.85%