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Q: Average real return
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A: INTRODUCTION ANSWERS
Q: CPI
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- Consider the following table for a seven-year period: Returns Year U.S. Treasury Bills Inflation 3.55% -1.17% 1234567 3.40 4.30 4.72 2.52 1.40 1.13 Average real return -2.31 -1.21 0.63 -6.45 -9.37 -1.32 What was the average real return for Treasury bills for this time period? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) %Assume the CPI increases from 139.2 to 142.6 over the period. What is the inflation rate implied by this CPI change over this period? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)Inflation, nominal interest rates, and real rates. From 1991 to 2000, the U.S. economy had an annual inflation rate of around 3.11%. The historical annual nominal risk-free rate for this same period was around 6.74%. Using the approximate nominal interest rate equation and the true nominal interest rate equation, compute the real interest rate for that decade. What is the estimated real interest rate using the approximate nominal interest rate equation for that decade? nothing% (Round to two decimal places.)
- The real rate is 4 percent and the inflation rate is 5.6 percent. What rate would you expect to see on a Treasury bill? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)In Oman, the price index in 1985 is 88.1, and the price index in 2005 is 182.9.What is the average inflation rate for this period? Select one: a. 44.09 % b. 3.72 % c. 107.60 % d. -3.59 %Assume that the expected rates of inflation over the next 5 years are 9 percent, 7 percent, 10 percent, 8 percent, and 6 percent, respectively. What is the average expected inflation rate over this 5-year period? Group of answer choices 9% 7% %5 8%
- What should be the value of a Bankers' Acceptance with a $100,000 face value and 79 days until maturity quoted on a discount basis yielding 1.8935% with the current inflation rate of 2.2972? Consider the same question above assuming a $250,000 face value and 279 days until maturity quoted on a discount basis yielding .8935% with the current inflation rate of 1.467?Treasury bills are currently paying 9 percent and the inflation rate is 4.5 percent. What is the approximate real rate of interest?A stock had a return of 6.8 percent last year. If the inflation rate was 1.2 percent, what was the approximate real return? (Enter your answer as a percent rounded to 1 decimal place.)
- The table below contains the price indexes for the macroeconomy for several years. Price Index 100 105 2010 - Base Year 2011 2012 2013 130 145 2014 140 Calculate the inflation that took place in 2012 23.8% 80.8% 25% O 19.2%Consider the following table for a seven-year period: Year 1 2 3 4 5 6 7 U.S. Treasury Bills 3.45% 3.30 4.20 4.62 2.42 1.30 1.03 Returns Average real return Inflation -1.15% -2.29 -1.19 0.61 -6.43 -9.35 -1.30 What was the average real return for Treasury bills for this time period? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. %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%.…