An analyst gathered the following year-end price level data for an economy: 2014 2018 2019 191 207.3 213.8 a. What is the economy's annual inflation rate for 2019? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Inflation rate % b. What is the average compounded inflation rate for 2014–2019? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

An analyst gathered the following year-end price level data for an economy: 2014 2018 2019 191 207.3 213.8 a. What is the economy's annual inflation rate for 2019? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Inflation rate % b. What is the average compounded inflation rate for 2014–2019? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

Name: An analyst gathered the following year-end price level data for an ec
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Description: An analyst gathered the following year-end price level data for an economy:201420182019191207.3213.8a. What is the economy's annual inflation rate for 2019? (Do not round intermediate calculations. Enter your answer as a percentrounded to 2 decimal

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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If Treasury bills are currently paying 6.25 percent and the inflation rate is 1.8 percent, what is the approximate and the exact real rate of interest? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Approximate real rate Exact real rate % %
Suppose on January 15, 2018, the U.S. Treasury issued a ten-year inflation indexed note with a coupon of 7%. On the date of issue, the CPI (consumer price index) was 215. By January 15, 2028, the CPI index had decreased to 165. What principal and coupon payment was made on January 15, 2028? (Note: U.S. Treasury pays semi-annual coupons) The CPI index deppreciated by The principal payment is $ The coupon payment is $ . (Round to five decimal places.) (Round to the nearest cent.) (Round to the nearest cent.)
The amount of goods and services each dollar buys at a given point in time is: Group of answer choices inflation None of the options consumer price index (CPI) purchasing power
2a. In 2000, the value of the Consumer Price Index was 171.20 and the price of gasoline (per gallon) was $1.56. Six years later in 2006, the value of the Consumer Price Index was 200.43 and the price of gasoline (per gallon) was $2.56. What was the general inflation rate during this period?
Suppose inflation rates in the U.S. and France are expected to be 4% and 9%, respectively, next year and 6% and 7%, respectively, in the following year. If the current spot rate is $.1050, then the expected spot value of the franc in two years is a. $.1111 b. $.0992 c. $.1074 d. $.1024
Bid/Ask on Dollar/Euro Forwards. Use the following spot and forward bid-ask rates for the U.S. dollar/euro (US$/€) from December 10, 2010, to answer the following questions: a. What is the mid-rate for each maturity? b. What is the annual forward premium for all maturities? (Click on the icon to import the table into a spreadsheet.) Period spot 1 month 2 months 3 months 6 months 12 months Bid Rate 1.3234 1.3233 1.3231 1.3227 1.3218 1.3197 Ask Rate D 1.3235 1.3234 1.3232 1.3229 1.3221 1.3201
Suppose the spot and three-month forward rates for the yen are ¥114.37 and ¥113.89, respectively. a. Is the yen expected to get stronger or weaker? b. What would you estimate is the difference between the inflation rates of the United States and Japan? Note: A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. a. Yen expected to get strong or weaker b. Difference between the inflation rates %
Assume that in 2020, a Liberty Seated half dollar issued in 1891 was sold for $209,000. What was the rate of return on this investment? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.
Crane Corporation began operations on December 1, 2019. The only inventory transaction in 2019 was the purchase of inventory on December 10, 2019, at a cost of $ 21 per unit. None of this inventory was sold in 2019. Relevant information is as follows. Ending inventory units December 31, 2019 110 December 31, 2020, by purchase date December 2, 2020 110 July 20, 2020 50 160 During the year 2020, the following purchases and sales were made. Purchases Sales March 15 310 units at $ 25 April 10 210 July 20 310 units at 26 August 20 310 September 4 210 units at 29 November 18 160 December 2 110 units at 32 December 12 210 The company uses the periodic inventory method.
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…
3. The following table gives actual data on the U.S. CPI and the S&P 500 total return index (SPTRI). CPI SPTRI 12/3 1/2011 226 2159 12/3 1/2012 230 2504 12/3 1/2013 233 3316 12/3 1/2014 235 3769 А. Use this data to compute the average annual nominal return and real return for two consecutive 1- year holding period returns of a sto ck portfolio that matches the S&P 500 total return index. (for example you could compute 2011-12 and 2012-2013) Please use continuous compounding. Express your final answer in percentage. В. Now compute the average annual real return to a 2-year holding -period portfolio of your two consecutive years. С. You have a friend who has been studying the stock market for the last few years and is about to invest $10,000 in a highly diversified portfolio. After 10 years, your friend expects to have over $66,000 in real dollars. You recall from your favorite report in Econ 135 that the average 10 year holding period return is about 7% with a standard deviation of 6%.…
If investors are to earn a 2.4% real interest rate, what nominal interest rate must they earn if the inflation rate is: Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Answer is complete but not entirely correct. Nominal Interest Rate Inflation Rate a. Zero b. 3.4% c. 5.4% 2.40 % 5.80% 7.80%

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