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Over the last nine years, you have earned the following returns on the NZX Year Return (ending in March) 2013-2014 17.45% 2014-2015 15.17% 2015-2016 17.26% 2016-2017 7.94% 2017-2018 16.92%

Over the last nine years, you have earned the following returns on the NZX Year Return (ending in March) 2013-2014 17.45% 2014-2015 15.17% 2015-2016 17.26% 2016-2017 7.94% 2017-2018 16.92%

Essentials Of Investments
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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just d and e please or anyone of them thank you

Over the last nine years, you have earned the following returns on the NZX Year Return (ending in March) 2013-2014 17.45% 2014-2015 15.17% 2015-2016 17.26% 2016-2017 7.94% 2017-2018 16.92% 2018-2019 19.54% 2019-2020 0.36% 2020-2021 28.93% 2021-2022 -5.17% You have also collected the level of the CPI over the same period: Date Level March 2013 March 2014 March 2015 March 2016 March 2017 958 972 975 979 1000 1011 1026 March 2020 1052 March 2021 1068 March 2022 1142 March 2018 March 2019 (a) For each tax year, calculate the inflation rate. (b) Now calculate a real rate of return for the NZX50 (use the full for- mula, not the approximation) for each year. (c) What is the mean nominal return for the NZX50? What is the mean real return? (d) What is the nominal volatility for the NZX50? What is the real volatility of the NZX50? (e) Suppose New Zealand had a 33% tax levied on capital gains and all dividends. Repeat your analysis, calculating after-tar mean real and nominal returns, along with real and nominal after-tax volatilities.
Transcribed Image Text:Over the last nine years, you have earned the following returns on the NZX Year Return (ending in March) 2013-2014 17.45% 2014-2015 15.17% 2015-2016 17.26% 2016-2017 7.94% 2017-2018 16.92% 2018-2019 19.54% 2019-2020 0.36% 2020-2021 28.93% 2021-2022 -5.17% You have also collected the level of the CPI over the same period: Date Level March 2013 March 2014 March 2015 March 2016 March 2017 958 972 975 979 1000 1011 1026 March 2020 1052 March 2021 1068 March 2022 1142 March 2018 March 2019 (a) For each tax year, calculate the inflation rate. (b) Now calculate a real rate of return for the NZX50 (use the full for- mula, not the approximation) for each year. (c) What is the mean nominal return for the NZX50? What is the mean real return? (d) What is the nominal volatility for the NZX50? What is the real volatility of the NZX50? (e) Suppose New Zealand had a 33% tax levied on capital gains and all dividends. Repeat your analysis, calculating after-tar mean real and nominal returns, along with real and nominal after-tax volatilities.
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