15) The nominal required return on XYZ stock is 14%. The nominal risk-free rate of return is 4%and the real risk-free rate of return is 2%. How much are investors requiring as compenssation forrisk? What is the inflation premium?

An inflation premium is the part of prevailing interest rates that results from lenders compensating…

15) The nominal required return on XYZ stock is 14%. The nominal risk-free rate of return is 4% and the real risk-free rate of return is 26. How much are investors requiring as sompensation for risk? What is the inflation premium?

15) The nominal required return on XYZ stock is 14%. The nominal risk-free rate of return is 4% and the real risk-free rate of return is 26. How much are investors requiring as sompensation for risk? What is the inflation premium?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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15) The nominal required return on XYZ stock is 14%. The nominal risk-free rate of return is 4%
and the real risk-free rate of return is 2%. How much are investors requiring as compenssation for
risk? What is the inflation premium?

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