2. Over the last nine years, you have earned the following returns on theNZXYear(ending in March)2013-201417.45%2014-2015 15.17%2015-2016 17.26%2016-2017 7.94%2017-2018 16.92%2018-2019 19.54%0.36%2019-20202020-2021 28.93%2021-2022-5.17%ReturnYou have also collected the level of the CPI over the same period:DateMarch 2013March 2014March 2015March 2016March 2017March 2018March 2019March 2020March 2021March 2022Level958972975979100010111026105210681142(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 meanreal return?(d) What is the nominal volatility for the NZX50? What is the realvolatility of the NZX50?(e) Suppose New Zealand had a 33% tax levied on capital gains and alldividends. Repeat your analysis, calculating after-tax mean real andnominal returns, along with real and nominal after-tax volatilities.

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Answered: Over the last nine years, you have…

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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The table below shows the annual change in the average nominal wage and inflation rate since 2008. a. Compute the percentage change in real income for each year shown in the table. Instructions: In part a, round your answers to 2 decimal places. In parts b and c, enter your answers as a whole num negative number include a minus sign. Percentage Changes in Nominal Income and Prices Annual Annual Inflation Nominal Wage Rate Growth Annual Real Wage Growth (percent) Year (percent) (percent) 2008 4.08% 0.35% 2009 -0'.37 -1.31 2010 1.71 -0.79 2011 3.4 1.48 2012 2.18 2.91 2013 1.51 2.39 b. Of the years listed above, the paycheck of the average worker declined in of the six years. c. Of the years listed above, the purchasing power of the average worker declined in of the six years. d. The average real income of households can increase (Click to select)
Q17 The past five monthly returns for Kohls are 4.11 percent, 3.62 percent, −1.68 percent, 9.25 percent, and −2.56 percent. What is the average monthly return? (Round your answer to 3 decimal places.) AVERAGE RETURN. %
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Suppose that the current 1-year rate (1-year spot rate) and expected 1-year T-bill rates over the following three years (i.e., years 2, 3, and 4, respectively) are as follows:1R1 = 2.62%, E(2r1) = 3.90%, E(3r1) = 4.40%, E(4r1) = 5.90%Using the unbiased expectations theory, calculate the current (long-term) rates for one-, two-, three-, and four-year-maturity Treasury securities
Suppose that your salary is $35,000 in year one, will increase at 6% per year through year 4, and is expressed in actual dollars as follows: End of Year Salary (A$) 1 $35,000 2 37,100 3 39,326 4 41,685 If the general price inflation is expected to average 8% per year for the first two years and 7% per year for the last two years, A. What is the salary in real terms year 2? B. What is the % of increase in real terms from year 1 to year 2? (expressed in decimals)
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Please solve on paper 4.32 Calculate the of x for the CF shown such that the equivalent AW in (1-9) is equal to (2,000) ? i, = 12% per year compounded quarterly? 1 2 3 5 7 8 year 4 CF 200 300 400 500 600 700 800 900 1000
Suppose the effective rate of interest is 4% per annum during 2010 and 2011, and 2.4695% per half year thereafter. Suppose also that the cashflows are +100 on 1 January 2010 and on 1 January 2011 -20 on 1 July 2011, 1 January 2012 and 1 January 2013, -35 on 1 July 2013 and 1 January 2014. What is the net value of these cashflows on i) 1 January 2014? ii) 1 January 2010? iii) 1 July 2012?
Hum
Assume inflation is 0.2% per month. Would you rather earn a nominal return of 0.75% per month, compounded monthly, or a real return of 6.5% APR, compounded annually? (Note: Be careful not to round any intermediate steps less than six decimal places.) The annual rate for the nominal return of 0.75% per month is (Type your answer in decimal format. Round to six decimal places.) The nominal annual rate for the real return of 6.5% APR is (Type your answer in decimal format. Round to six decimal places.) (Select from the drop-down menus.) Based on a comparison of the two rates and the current inflation rate, you would prefer the option over the option. real return compounded annually nominal return compounded monthly

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