The value of an investment appreciated over a year by 7%, while the rate of inflation over the same period was 2%. What is the nominal rate of return? Multiple choice question. 9% 5% 7% 2%
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The value of an investment appreciated over a year by 7%, while the rate of inflation over the same period was 2%. What is the nominal
9%
5%
7%
2%
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- You estimate that an investment of yours has generated a nominal rate of return of 14% p.a. Over that same period of time, inflation has increased at a rate of 4% p.a. Which of the following is closest to your real rate of return p.a.? Group of answer choices 9.62% 17.52% 11.76% 8.65%An investment had a nominal return of 10.6percent last year. If the real return on investment was only 6.3 percent, what was the inflation rate for the year? a. 17.57% b. 3.89% c. 10.73% d. 4.49%What is the (exact) nominal return on an investment that earns a real return of 14.7% while inflation is 7.4%? Enter your response, in percent (%), correct to TWO decimal places.
- Nominal rate of return is 10.80%. Inflation rate is 6.95%. What is the real rate of return as per Fisher equation? a) 4.80% b) 17.75% c) 6.95% d) 3.60%Historical rate of returns: years, return: 1, 7% 2,14% 3,26% 4,-11% What is the standard deviation? If real rate interest is 3.1% and expected inflation is 7.3% then exact nominal rate of return is?If an investment grew by 9% while it had a change in purchasing power of 7%, what was the inflation rate over the period? (Convert your answer to a percent but enter numbers only in your response.)
- 6. The Fisher effect and the cost of unexpected inflation Suppose the nominal interest rate on savings accounts is 11% per year, and both actual and expected inflation are equal to 6%. Complete the first row of the table by filling in the expected real interest rate and the actual real interest rate before any change in the money supply. Time Period Nominal Interest Rate Expected Inflation Actual Inflation Expected Real Interest Rate Actual Real Interest Rate (Percent) (Percent) (Percent) (Percent) (Percent) Before increase in MS 11 6 6 Immediately after increase in MS 11 6 10 Now suppose the Fed unexpectedly increases the growth rate of the money supply, causing the inflation rate to rise unexpectedly from 6% to 10% per year. Complete the second row of the table by filling in the expected and actual real interest rates on savings accounts immediately after the increase in the money supply (MS). The unanticipated change in…Two investments generated the following annual returns: Investment X 13% 17 24 19 8 20X0 20X1 20X2 20X3 20X4 a. What is the average annual return on each investment? Round your answers to one decimal place. The average annual rate of return on X: The average annual rate of return on Y: b. What is the standard deviation of the return on investments X and Y? Round your answers to two decimal places. -Select- % % Standard deviation of X: Standard deviation of Y: c. Based on the standard deviation, which investment was riskier? was riskier. Investment Y 23% 26 14 25 20can you help me with question b please
- You know that the stated rate of return is not what you really earned. If the inflation rate last year was 4.1%, and your investment had a stated rate of 18%, what was your real return? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Real return %What exact real rate of return is implied by a nominal return of 6% and an inflation rate of 2.4% over the same time period?(please write answer in a decimal format using 5 decimal places)The expected inflation rate is 2.1%. What nominal interest rate is necessary to earn a real return of 1.5% on an investment?