Large-cap stocks had the nominal rates of return of 6.65 percent. The rate of inflation during...
Large-cap stocks had the nominal rates of return of 6.65 percent. The rate of inflation during the last year was 2.00 percent. What is the real rate of return for large-cap stocks? Round the answer to two decimal places in percentage form.
Homework Answers
The formulae is below
(1+nominal)=(1+real)*(1+inflation)
real return=((1+nominal)/(1+inflation))-1
=((1+6.65%)/(1+2%))-1
=4.56%
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