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)
Q: (Related to Checkpoint 9.6) (Inflation and interest rates) What would you expect the nominal…
A: Nominal interest rate refers to the interest rate before taking inflation into account. The equation…
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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Q: (Related to Checkpoint 9.6) (Inflation and interest rates) What would you expect the nominal rate of…
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Q: rate
A: Introduction: Treasury bill also known as T-bills is a short term money market instrument of the US…
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.…
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Q: what should the nominal rate of interest be?
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A: Given: Real rate Inflation rate 4.50% 7% 8% 12% 3% 2% 1% 3.50%
Q: If the annual interest rate is 7%, what is the monthly interest rate that would be used as the "r"…
A: Time value of money (TVM) refers to the method used to measure the amount of money at different…
Q: ume the CPI increases from 133.8 to 136.6 over the period. What is the inflation rate implied by…
A: CPI is the consumer price index which shows the prices of goods during year and is used for…
Q: Please answer quickly and correctly Suppose that the general inflation rate is 3% and the real…
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Q: Use the following information to answer the question(s) below. Year 2007 2008 2009 Risk-free Return…
A: YearRisk-Free ReturnMarket ReturnWyatt Oil…
Q: If the rate of inflation is 4.6%, what nominal interest rate is necessary for you to earn a 2.2%…
A: The nominal interest rate is an interest rate before considering the inflation rate. The formula for…
Q: You want to earn a real rate of return of 6.50% at a time when the inflation rate is 3.25%. What is…
A: Interest refers to the amount charged by the lender on the lent amount. The borrower of the loan is…
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A: Given, Inflation Rate =3.88% Annual nominal risk-free rate = 5.98%
Q: You know that the stated rate of return is not what you really earned. If the inflation rate last…
A: The inflation rate refers to the rate at which the value of the currency decreases over time and the…
Q: If investors are to earn a 2.9% real interest rate, what nominal intere inflation rate is: Note: Do…
A: Nominal interest rate is the interest rate that includes inflation also and real interest rate…
Q: The nominal rate of interest would be %.
A: We can define real interest rate as those interest rates which have been adjusted for the inflation…
Q: a. What is the approximate real rate of interest? (Enter your answer as a percent rounded to 2…
A: The real interest rate is examining the actual value of money. After accounting for fluctuating…
Q: (Click on the following icon in order to copy its contents into a spreadsheet.) Approximate Real…
A:
Q: What would you expect the nominal rate of interest to be if the real rate is 5.3 percent and the…
A: Nominal Interest Rate: It refers to the rate of interest that does take into consideration the…
Q: The rate of inflation is 4.1%. What nominal rate of return will you need in order to achieve a 5.0%…
A: Nominal Rate of Return = {(1 + Real Interest Rate)} x {(1 + Inflation Rate)} - 1
Q: If the rate of inflation is 4.8%, what nominal interest rate is necessary for you to earn a 2.2%…
A: Inflation rate = 4.8% Real rate = 2.2%
Q: The real interest rate is 5% and the inflation rate is 3%. What is the nominal interest rate? Round…
A: nominal interest rate = real interest rate + inflation rate
Q: (Related to Checkpoint 9.6) (Inflation and interest rates) What would you expect the nom to be if…
A: The nominal interest rate is usually greater than the inflation rate by the amount of the expected…
Q: lation and interest rates What would you expect the nominal rate of interest to be if the real rate…
A: Nominal interest rate is rate which includes both real return and inflation and generally more than…
Q: The annual inflation rate is expected to be 4.78% and the nominal (annual) interest rate is 5.75%.…
A: Inflation rate (π) =4.78% Nominal rate of interest (i)=5.75%. Using Fischer equation, real interest…
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A: The question is related to the approximate real rate and exact real rate. Bothe the rates are…
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A: The real rate of return is the net percentage of interest earned after adjusting the inflation rate.…
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: The nominal rate of interest is 6% and the real rate of interest is 3%. What is the expected…
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A: Working Note #1 Calculation of inflation gap: Actual inflation=3% Target inflation = 2.5% Inflation…
Q: (Related to Checkpoint 9.6) (Inflation and interest rates) What would you expect the nominal rate of…
A: Nominal interest rate is the percentage increase in money paid to lender for use of borrowed money.
Q: Treasury bills are currently paying 7 percent and the inflation rate is 3.8 percent. What is the…
A: Approximate real rate of return = Nominal rate-Inflation rate Exact real rate of return = (1+Nominal…
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A: Data given: Maturity (year) Yield 1 5.37% 2 5.42% 3 5.58% 4 5.64% 5 5.56% 10 5.68%…
Q: the nominal interest rate is .07 and the expected inflation rate is .02. The real rate of interest…
A: The real rate of interest refers to the rate which is used for the adjustments for inflations that…
Q: What is the inflation rate implied by this CPI change over this period?
A: Implied Inflation Rate: It is computed by dividing the change in consumer price index (CPI) by the…
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Q: You observe that the current interest rate on short-term U.S. Treasury bills is 4.86 percent. You…
A: Nominal rate = 0.0486 Inflation rate = 0.0165 Real rate of interest = ? Real rate of interest is…
Q: The real rate is 4 percent and the inflation rate is 5.6 percent. What rate would you expect to…
A: When the money supply increases over the period of time then by adversely affects the demand and…
Q: Related to Checkpoint 9.6) (Inflation and interest rates) What would you expect the nominal rate…
A: Nominal Interest Rate is that rate of interest which includes the inflation rate of that currency.…
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- An analyst gathered the following year-end price level data for an economy: 2014 2018 2019 191 207.3 213.8 a. What is the economy's annual inflation rate for 2019? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Inflation rate % b. What is the average compounded inflation rate for 2014-2019? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Average rate %Assume that you must estimate what the future value will be two years from today using the future value of 1 table. (PV of $1, EV of $1. PVA of $1, and FVA of $1) Which interest rate column and number-of-periods row do you use when working with the following rates? (Round percentage answers to 2 decimal places.) Answer is complete but not entirely correct. Number of Periods 1. 12% annual rate, compounded annually 2.8% annual rate, compounded semiannually 3. 12% annual rate, compounded quarterly 4. 12% annual rate, compounded monthly Interest Rate 12.00 2.00 3.00 1.00 % % % % 2 80 24Suppose 1-year T-bills currently yield 7.00% and the future inflation rate is expected to be constant at 2.00% per year. What is the real risk-free rate of return, r*? The cross-product term should be considered , i.e., if averaging is required, use the geometric average. (Round your final answer to 2 decimal places.)
- If Treasury bills are currently paying 6.25 percent and the inflation rate is 1.8 percent, what is the approximate and the exact real rate of interest? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Approximate real rate Exact real rate % %If the rate of inflation is 5.00%, what nominal interest rate is necessary for you to earn a 3.00% real interest rate on your investment? (Note: Be careful not to round any intermediate steps less than six decimal places.) The nominal interest rate needed for your investment is %. (Round to two decimal places.)Assume a nominal discount rate of 9% and a 2% forcasted inflation rate .Calculate real discount rate Please include formula.
- Treasury bills are currently paying 6 percent and the inflation rate is 3.30 percent. What is the approximate real rate of interest? (Round your answer to 2 decimal places. (e.g., 32.16)) Approximate real rate %If the annual interest rate is 8%, what is the daily interest rate that would be used as the "r" in the time value of money equation? Hint: the equation uses the decimal equivalent of the percent Enter your answer to four decimal places.If investors are to earn a 3.7% real interest rate, what nominal interest rate must they earn if the inflation rate is: Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Inflation Nominal Interest Rate a. Zero b. 4.7% c. 6.7% Rate % % %
- What is the real interest rate given a nominal rate of 8.7% and an inflation rate of 1.5%? A. 11.3% B. 8.5% C. 7.1% D. 9.9%Suppose the real rate is 8.5 percent and the Inflation rate is 2 percent. What rate would you expect to see on a Treasury bill? Multiple Cholce 9.60% 11.74% 9.07% 12.27% 10.67%The two-year interest rate is 10.4%, and the expected annual inflation rate is 5.2%. a. What is the expected real interest rate? b-1. If the expected rate of inflation suddenly rises to 7.2%, what does Fisher's theory say about how the real interest rate will change? b-2. If the expected rate of inflation suddenly rises to 7.2%, what will be the new nominal rate? Complete this question by entering your answers in the tabs below. Req A Req B1 Req B2 What is the expected real interest rate? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Expected real interest rate %
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