31. The price index was 220 in one year and 260 in the next year. What was the inflation rate? a. 9.0 percent b. 114.6 percent C. 18.2 percent d. 40.0 percent
Q: Inflation Rate: 2.4% Nominal Interest Rate: 7.2% What was the real rate of interest over the last…
A: Inflation rate = 2.4% Nominal interest rate = 7.2% Real rate of interest = nominal rate - inflation…
Q: Consider the following table for an eight-year period: Year T-bill return Inflation 123L 7.41% 8.59%…
A: The answer is shown in the following table:| **a. Treasury bills** | **Inflation rate** || --- | ---…
Q: Suppose annual inflation rates in the United States and Mexico are expected to be 6 percent and 80…
A: Peso's spot value in 3 years is calculated using following equation Spot value in 3 years = S0$/Peso…
Q: We know that during the last 10 years, the average historical return on a market index is 15%. We…
A: Given: Market index return 15% Inflation rate 3% Risk free rate 6%
Q: what should the nominal rate of interest be?
A: Nominal interest rate (NIR) refers to a interest rate which an investor is expect from his…
Q: . Inflation is expected to average 2.4% per year for the next 44 yea /hat percentage of the…
A: There is decrease in purchasing power due to increase in inflation and over the years this effect is…
Q: (Inflation and interest rates) Assume the expected inflation rate is 4.1 percent. If the current…
A: A financial product's declared or marketed interest rate, such as that on a loan, bond, or savings…
Q: ume the CPI increases from 133.8 to 136.6 over the period. What is the inflation rate implied by…
A: CPI is the consumer price index which shows the prices of goods during year and is used for…
Q: Assume that between 2005 and 2015 the price level doubled. What is the approximate average annual…
A: Solution:Average annual rate means the rate on per annum basis.We know, average annual rate =…
Q: If an investment grew by 9% while it had a change in purchasing power of 7%, what was the inflation…
A: Real Rate: It is the rate which the investor would receive by investing the money. The real rate of…
Q: An investment had a nominal return of 11.8 percent last year. If the real return on the investment…
A: Nominal rate = 11.8% Real rate = 8.7%
Q: Suppose the real rate is 8.5 percent and the inflation rate is 2.8 percent. What rate would you…
A: We will use the below formula to calculate the return on Treasury billReturn on Treasury bill =…
Q: You know that the stated rate of return is not what you really earned. If the inflation rate last…
A: The inflation rate refers to the rate at which the value of the currency decreases over time and the…
Q: Multiple Choice An investment had a nominal return of 100 percent last year. If the real return on…
A: Nominal rate = 10%Real rate = 7.6%
Q: Assume that expected rates of inflation over the next 5 years are 4 percent, 7 percent, 10 percent,…
A: Average inflation rate = ((1+i1)*(1+i2)*(1+i3)*(1+i4)*(1+i5))1/n-1 Where i1 = Inflation rate year 1…
Q: Suppose we have the following Treasury bill returns and inflation rates over an eiga year period:…
A: The national government has issued short-term financial instruments called Treasury Bills. T-bills…
Q: 1. Which of the following regarding inflation is true? (a) If CPI changes from 100 to 105 in a year…
A: Consumer price index is an economic indicator of change in total expenditure value by the customers.…
Q: What was the average real return for Treasury bills for this time period? (Do not round intermediate…
A: T-bills refers to a debt securities or government bonds issued by the central bank on behalf of the…
Q: Consider the following table for a seven-year period: Returns U.S. Treasury Bills 3.90% 3.75 ITT…
A: A treasury bill can be explained as a money market instrument issued by the government to raise…
Q: Suppose 1-year T-bills currently yield 7.40% and the future inflation rate is expected to be…
A: The theoretical rate of return on an investment or loan that bears no danger of financial loss owing…
Q: Assume that the interest rate offered on a CD was 4.8% when the rate of inflation was 2.3%. If the…
A: In this question nominal rate of interest is given so we need to find out the real interest rate.…
Q: CPI
A: Inflation is the change in prices from previous year to current year expressed in percentage.
Q: 0 years has been 30% and inflation has been 23%. what is your effective raise after accounting for…
A: Given, Raise rate, r = 30% Inflation rate, i = 23%
Q: Say you own an asset that had a total return last year of 17 percent. Assume the inflation rate last…
A: The inflation rate refers to the rate at which the value of the currency decreases over time and the…
Q: 32. Inflation in Brazil in 1992 averaged about 23% per month. What was the annual inflation rate?…
A: The conceptual formula used:
Q: Consider the following table for a seven-year period: Year 23456N 7 Returns U.S. Treasury Bills…
A: Real Return= ((1+US treasury Bills)/(1+Inflation rate))-1
Q: Suppose the real rate is 7 percent and the inflation rate is 2.6 percent. What rate would you expect…
A: concept. (1+Rf) = (1 + RR) * (1+IR) where , Rf = risk free rate RR =real rate IR = inflation rate
Q: 2. Canadian Treasury bills are yielding 2.81%. Inflation is 2.45%. What is the real rate of return…
A: Real interest rate is that rate of interest which does not include the inflation effect. If we…
Q: a. In Year 1 the CPI was 100; 30 years later, it was 239. What was the annual rate of inflation?…
A: Inflation happens when the prices of goods and services grow over time, reducing a currency's buying…
Q: 2014 2018 2019 178 194.3 200.8 a. What is the economy's annual inflation rate for 2019? (Do not…
A: Inflation rate:The inflation rate is an important economic indicator that reflects the erosion of…
Q: Suppose we have the following Treasury bill returns and inflation rates over an eight- year period:…
A: Year Treasury Bills Inflation 1 7.37% 8.79% 2 8.07% 12.42% 3 5.95% 7.02% 4 5.15% 4.94% 5…
Q: An investment offers a total return of 11 percent over the coming year. Alex Hamilton thinks the…
A: 1) Nominal return is 11% and real rate of return is 7.4% Nominal rate of return when adjusted for…
Q: Between the years 1974 and 1984, the average annual inflation rate was 3%. Find the salary in the…
A: Inflation refers to a rise in the price level over a period of time. This changes the present worth…
Q: Suppose that actual inflation is 3 percent, the Fed's inflation target is 2.5 percentage points, and…
A: Working Note #1 Calculation of inflation gap: Actual inflation=3% Target inflation = 2.5% Inflation…
Q: Using the Treasury yield information in part c, calculate the following rates using geometric…
A: Data given: Maturity (year) Yield 1 5.37% 2 5.42% 3 5.58% 4 5.64% 5 5.56% 10 5.68%…
Q: . Inflation is expected to average 2.4% per year for the next 44 years. How much money will be…
A: Inflation rate = 2.4% Period = 44 Years Value of goods and service today = $1
Q: Your investments increased in value by 16.3 percent last year, but your purchasing power increased…
A: Percentage of Increase in Value = 16.3%Percentage of Increase in Purchasing Power = 7.5%
Q: he value of your investment increased by 9.77% last year, and your purchasing power decreased by…
A: Inflation is a situation of general increase in prices. Inflation leads to decrease in purchasing…
Q: the nominal interest rate per year is 12% and the inflation rate is 8%, what is the real rate of…
A:
Q: the nominal interest rate is .07 and the expected inflation rate is .02. The real rate of interest…
A: The real rate of interest refers to the rate which is used for the adjustments for inflations that…
Q: Consider the following table for a seven-year period: Year 1234567 Returns U.S. Treasury Bills…
A: The Fisher equation is an equation in macroeconomics that describes the relationship between nominal…
Q: What is the inflation rate implied by this CPI change over this period?
A: Implied Inflation Rate: It is computed by dividing the change in consumer price index (CPI) by the…
Q: If the expected inflation rate is 3.45%, the realized real rate of return is 3.80%, and the actual…
A: Expected Inflation Rate is 3.45% Realized Real Rate of Return is 3.80% Actual Inflation Rate is…
Step by step
Solved in 3 steps with 1 images
- Inflation is a general increase in prices and may be measured by the Consumer Price Index (CPI). Use Appendix A to answer the questions. a. In Year 1 the CPI was 100; 30 years later, it was 239. What was the annual rate of inflation? Round your answer to the nearest whole number. %Inflation in log is 5.0430853%. If the last year’s price level was 610, what is this year’s price level?1, Consider the following table for an eight-year period: Year T-bill return Inflation 1 7.47% 8.53% 2 8.94 12.16 3 6.05 6.76 4 5.97 5.04 5 5.63 6.52 6 8.54 8.84 7 10.74 13.11 8 13.00 12.34 a, Calculate the average return for Treasury bills and the average annual inflation rate (consumer price index) for this period. b, Calculate the standard deviation of Treasury bill returns and inflation over this time period. c, Calculate the real return for each year. d, What is the average real return for Treasury bills?
- An investment had a nominal return of 10.6percent last year. If the real return on investment was only 6.3 percent, what was the inflation rate for the year? a. 17.57% b. 3.89% c. 10.73% d. 4.49%69. Consumer Price Index (a) The CPI was 163.0 for 1998 and 215.3 for 2008. Assuming that annual inflation remained constant for this time period, determine the average annual inflation rate. (b) Using the inflation rate from part (a), in what year will the CPI reach 300?Consider the following table for an eight-year period: Year T-bill return Inflation 123L 7.41% 8.59% 8.64 12.22 5.99 6.82 4 5.67 4.98 5.57 6.58 6 8.24 8.90 7 8 10.68 12.70 13.17 12.40 a. Calculate the average return for Treasury bills and the average annual inflation rate (consumer price index) for this period. Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. b. Calculate the standard deviation of Treasury bill returns and inflation over this time period. Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. c. Calculate the real return for each year. Note: A negative answer should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. d. What is the average real return for Treasury bills?…
- Consider the following table for an eight-year period: Year T-bill return Inflation 1 7.47 % 8.53 % 2 8.94 12.16 3 6.05 6.76 4 5.97 5.04 5 5.63 6.52 6 8.54 8.84 7 10.74 13.11 8 13.00 12.34 Calculate the average return for Treasury bills and the average annual inflation rate (consumer price index) for this period. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Average return for Treasury bills % Average annual inflation rate % Calculate the standard deviation of Treasury bill returns and inflation over this time period. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Standard deviation of Treasury bills % Standard deviation of inflation % Calculate the real return for each year. (A negative answer should be indicated by a minus sign. Leave no cells…es www Year 1 2 3 4 5 Returns X59200 15 % -22 10 10 Y 22% 30 -27 "* 10 21 Using the returns shown above, calculate the arithmetic average returns, the variances, and the standard deviations for X and Y. (Do not round intermediate calculations. Enter your average return and standard deviation answers as a percent rounded to 2 decimal places, e.g., 32.16. Enter your variance answers rounded to 5 decimal places, e.g., .16161.) Average returns Variances Standard deviations X 15 % % % Y % &Consider the following table for an eight-year period: Year 1 2345678 T-bill return Inflation 7.40% 8.60% 8.59 12.23 5.98 6.83 5.62 4.97 5.56 6.59 8.19 8.91 10.67 13.18 12.65 12.41 a. Calculate the average return for Treasury bills and the average annual inflation rate (consumer price index) for this period. (Do not round Intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) b. Calculate the standard deviation of Treasury bill returns and inflation over this time period. (Do not round Intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) c. Calculate the real return for each year. (A negative answer should be Indicated by a minus sign. Leave no cells blank - be certain to enter "O" wherever required. Do not round Intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) d. What is the average real return for Treasury bills? (A negative…
- What is the (exact) nominal return on an investment that earns a real return of 14.7% while inflation is 7.4%? Enter your response, in percent (%), correct to TWO decimal places.Say you own an asset that had a total return last year of 11.5 percent. If the inflation rate last year was 6.5 percent, what was your real return? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Real return % ( Prev 7 of 10 NextConsider the following table for the period from 1973 through 1980. Inflation 8.80% 12.20 7.01 4.81 6.77 9.03 13.31 12.40 Year 1973 1974 1975 1976 1977 1978 1979 1980 T-bill return 6.93% 8.00 5.80 5.08 5.12 7.18 10.38 11.24 a. Calculate the average return for Treasury bills and the average annual Inflation rate (consumer price Index) for this period. Note: Do not round Intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. b. Calculate the standard deviation of Treasury bill returns and Inflation over this time period. Note: Do not round Intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. c. Calculate the real return for each year. Note: A negative answer should be indicated by a minus sign. Do not round Intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. d. What is the average real return for Treasury bills? Note: A negative answer…