The inflation rate in the United States has averaged 3% a year since 1900. Use the data in the table below to answer the following question: Average rates of return on Treasury bills, government bonds, and common stocks, 1900–2020. Portfolio Average Annual Rate of Return (%) Average Premium (Extra return versus Treasury bills) (%) Treasury bills 3.7   Treasury bonds 5.4 1.7 Common stocks 11.5 7.8 What was the average real rate of return on Treasury bills, Treasury bonds, and common stocks in that period? Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.

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: (Inflation and interest rates​) What would you expect the nominal rate of interest to be if the real…

A: The formula to calculate nominal rate of interest is: (1 + Nominal rate of return) = (1 + Real rate…

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A: The real return refers to the return that the investment provides to its holders after the effect of…

Q: Historical interest rates. Refer to Figure 5.4 in the popup window,W. What decade experienced the…

A: The answer for the multiple choice question is given hereunder :

Q: ​(Inflation and interest rates​) What would you expect the nominal rate of interest to be if the…

A: The nominal rate of interest is the rate that includes the inflation effect in the interest rate.…

Q: The following table shows the nominal returns on Brazilian stocks and the rate of inflation. Year…

A: a.Standard deviation = 35.71% b.Average real return = -3.28%Explanation:Step 1:Calculating the…

Q: The following table shows the nominal returns on Brazilian stocks and the rate of inflation.…

A: The objective of the question is to calculate the standard deviation of the market returns and the…

Q: a. What was the standard deviation of the market returns? Note: Use decimals, not percents, in your…

A: The real rate of return is similar to observing how much the money actually grows. It indicates the…

Q: If the current rate on U.S. Treasuries are 5.3% and the current rate on stocks are 8%, then what is…

A: In this question, we are required to determine the risk premium.

Q: Consider the following information for a period of years: Arithmetic Mean Long-term…

A: Real return = [(1+ in) / (1+ iI)] - 1 Where as in = Nominal rate ii  = Inflation rate

Q: Consider the following US treasury rate table expressed in percentage. Maturity Yield Last Last…

A: The conceptual formula used:

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A: This coefficient measures the linear correlation between two variables, providing a value between -1…

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Q: The following table shows the nominal returns on Brazilian stocks and the rate of inflation. Year…

A: Variables in the question:                Year     Nominal Return   (%)               Inflation…

Q: Over the past four years, large-company stocks and U.S. Treasury bills have produced the returns…

A: Here,

Q: What is the maturity of a U.S. Treasury bill with a bond equivalent yield of 8.56 percent and a face…

A: bond equivalent yield = r = 8.56%Face Value = fv = $100,000Price of Treasury bill = p =…

Q: Suppose we have the following Treasury bill returns and inflation rates over an eight- year period:…

A: a)Average return (Treasury bills) = Sum of Treasury bill returns​ / Number of years Average return…

Q: Over the past 4 years, large-company stocks and U.S. Treasury bills have produced the returns stated…

A: real rate of return=1+nominal rate of return1+inflation-1.....(1)

Q: Inflation, nominal interest rates, and real rates From 1991 to 2000, the U.S. economy had an annual…

A: Given, Inflation Rate =3.88% Annual nominal risk-free rate = 5.98%

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: Assume the average return on utility stocks was 8.9% over the past 40 years. �If the average return…

A: Risk premium is the excess return earned by an investor for taking on additional risk above the…

Q: Suppose on January 15, 2022, the U.S. Treasury issued a five-year inflation-indexed note with a…

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Q: Suppose that for the coming year, the inflation is forecast at an effective annual rate of 1.27%. If…

A: The issue is with finance, more especially with the computation of real interest rates or interest…

Q: If the average return on common stocks was 13.3%, the average Treasury bill rate was 3.8%, and the…

A: Nominal rate of Return = 15.90% Real rate of return = 10.90% Explanation:Nominal rate of Return =…

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: Suppose we have the following Treasury bill returns and inflation rates over an eight year period:…

A: t bills year treasury bill return - avg return (return - avg return)2 formula 1 10.45% -0.72%…

Q: nflation, nominal interest rates, and real rates. From 1991 to 2000, the U.S. economy had an annual…

A: The estimated real interest Rate is computed by: Estimated Real Interest Rate  = Nominal Annual Rate…

Q: ssume these were the inflation rates and U.S. stock market and Treasury bill returns between 1929…

A: Risk premium refers to the excess of rate of return over risk free rate. Risk premium is the reward…

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…

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Q: What was the average rate of inflation over the period of 2000-2016? ____%

A: INTRODUCTION    ANSWERS

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: In​ 2009, U.S. Treasury yielded​ 0.1%, while inflation was​ 2.7%. What was the real rate in​ 2009?…

A: The real rate of return or rate of yield is the nominal rate of interest or return which is adjusted…

Q: How can the behavior of market interest rates and bond returns over the past 50 years be described?…

A: Interest rates on deposits and other investments are determined by the combination of the money…