Which of the following is not a component of the required rate of return? a. expected rate of inflation b. time value of money c. risk d. holding period return e. nominal returns
Q: Suppose the annual nominal interest rate is 7 percent and the inflation rate is 7 percent. If you…
A: This can be defined as a concept that shows a given nominal amount refers to how many units of…
Q: With moderate 3% inflation, if a hamburger is costed $5 today (2016), how much it will become in…
A: The annual inflation rate is 3%, and it will remain the same. The cost of a hamburger in 2016 is $5
Q: 3. The rate of inflation as of Thursday is 6 %, this is expected to continue. Sylvia wants to earn a…
A: Given Rate of inflation =6% We know that the real rate of interest = nominal interest rate minus the…
Q: Inflation is a hectic problem of our economy especially in today’s life. How this problem influences…
A: Inflation is a hectic problem of our economy, especially in today’s life. How this problem…
Q: True or False : Inflation is a genuine issue for retirement planning because a person age 65 will…
A: Inflation refers to the situation where there is an increasing tendency in the general price level.
Q: Explain in detail how PKR value responds to increased relative inflation rate in USA in comparison…
A: The exchange rate is defined as the price of one nation's domestic currency in terms of another…
Q: According to the price index, it costs 200 dollars to buy a typical basket of goods in one year.…
A: 220-200/200*100 20/200*100=10
Q: A country is experiencing an inflation rate of exactly 100 percent per month for 4 months. At the…
A: Inflation is the consistent rise in general price level over period of time . And growth of…
Q: Year 2017 2018 2019 Unemployment Rate 11.63% 9.1% 8.0% Inflation Rate 4.39% 3.73% 3.91%…
A: Answer: Given data; Year 2017 2018 2019 Unemployment rate 11.63% 9.1% 8.0% Inflation rate…
Q: Which lending agreement represents the highest real rate of return for a bank when it lends its…
A: Real rate of return is computed with the help of following formula:Real rate = (1+Nominal rate) /…
Q: Forty years ago, a gallon of gas cost $1.20. Today, a gallon of gas costs 2.60. Suppose that the gas…
A: The gallon gas cost $1.20, fourty years ago. The present cost of gas is $2.60. The gas price…
Q: If the real interest rate is 11% and the rate of inflation is 3%, then if a firm can invest in a…
A: Introduction The nominal interest rate refers to the rate of interest before adjusting for…
Q: If the price of a good is $200 in 2015 and $204 in 2019, what is the inflation rate? A) 22% B) 20%…
A: Inflation refers to the situation of increasing price level in the economy.
Q: Officially consumer price inflation occurs when there is Inflation is measured by calculating A)…
A: C) an increase in the price level measured using CPI; the percentage change in a price index from…
Q: expected inflation equals
A: Fisher Effect says that we can calculate the real interest rate by the following formula: r = i - π,…
Q: A certain country calculates inflation using a consumer price index (CPI). Between 2016 and 2017 the…
A: Answer to the question is as follows :
Q: In 1990 the Consumer Price Index (CPI) was 150. Today, the Consumer Price Index (CPI) is 250.…
A: Given Information: Current CPI = 250 Past CPI = 150 Inflation Rate = Current CPI – Past CPIPast…
Q: Dean borrows $400 from Tim. Tim wants to make a 7% real return on his money, so they both agree on…
A: Inflation rate and rate of return: The inflation rate determines the growth rate of the overall…
Q: The average annual cost(tuition, fees, and room and board) at four-year private universities rose…
A: CPI (Consumer Price Index) measures the average change in prices of goods and services bought by…
Q: At the beginning of 2007 the CPI was 154. At the beginning of 2008 the CPI was 169. What is the…
A: Given CPI in 2007 = 154 CPI in 2008 = 169 The following formula wil be used to calculate rate of…
Q: Average inflation rate is _______ the values of the highest and lowest individual inflation rates…
A: The economics as a study is based upon the idea that the resources which the economies tend to have…
Q: Suppose you borrow $1,000 of principal that must be repaid at the end of two years, along with…
A: Inflation refers to the sustained increase in the general price level of goods and services in an…
Q: Real Income Joshua Vermier of Sacramento, California, received a raise after his first year on the…
A: Income comprises salary, wages, gratuity, other profit, or incidental benefit of any kind obtained…
Q: Which of the following statements is TRUE? (A) Official inflation data are often reliable. (B) It…
A: Inflation is one of the eocnomic factors that is used to analyze the economic condition of a…
Q: Hyperinflation is best described as: A. An extremely high and typically accelerating rate of…
A: Inflation refers to the increase in the average price level of goods or services over a period of…
Q: 1.As the inflation rate increases, the present value of a fixed payment receive in the future a)…
A: Since you have asked multiple question, we will solve the first question for you. If you want any…
Q: Inflation? is a continual increase in the price level. causes investment to increase causes the…
A: Inflation refers to a measure of the rate of increasing prices of goods and services in an economy.
Q: Which of the following statements explains inflation rate? a. Inflation rate is expressed per 1000…
A: Inflation rate measures the change in the price level of output through out the period. Basically…
Q: Automobile insurance policies (contracts) typically are issued every 6 months. Consider an actual…
A:
Q: If the consumer price index is given as 100 in 1992 and in 2004 it is 150, how much inflation…
A: Consumer Price Index is the most popular measure of inflation and deflation. It measures overall…
Q: The higher the expected rate of inflation, A) the lower is the nominal rate of interest.…
A: The term "expected rate of inflation" describes the anticipated rise in the average price of goods…
Q: Sally will earn $30,000 this year and $40,000 next year. The real interest rate is 20% between this…
A: The intertemporal budget constraint explains us about how an individual buyer takes consumption…
Q: Which statement best describes U.S. inflation between 1982 and 2000? A. It was virtually…
A: This question invites an exploration of the historical trends in U.S. inflation over a specific…
Q: A country is said to be experiencing inflation when A- the goods-market is rising over time B-…
A: The contradictory phase in economy a situation happens when there is deflation or fall in prices of…
Q: If the Consumer Price Index rises from 125 in a year to 130 in the following year, the rate of…
A: Consumer Price Index (CPI): It refers to a statistical estimate which measures the change in the…
Q: True or False: Inflation refers to a sustained increase in the general price level of goods and…
A: Inflation is an economic event which can be defined as the phenomenon of the increase in the general…
Q: Whether you gain or lose during a period of inflation depends on: a) how the price increases affect…
A: During the period of inflation, the general price level will continuosly rising.
Q: If inflation is 8% and the price of oil has increased by only 5%, then the relative price of oil: A)…
A: Inflation can be defined as a continuous and sustained increase in the general price level.
Q: Give an example of a good or service that has increased in price since the time when you were young.…
A: The consumer price index is a measure of inflation based on changes in the price level of a weighted…
Q: If energy prices increased 20%, you would expect the largest inflation increase in which of the…
A: Inflation refers to the situation of increasing price level in the economy.
Q: Discuss TWO (2) types of unemployment and provide a relevant example for each. (a) (b) Differentiate…
A: Unemployment is a situation when an individual included in the labor force of the economy is willing…
Q: If the inflation rate was 1% in 2014, 3% in 2015, and 2% in 2016, this economy experienced from 2014…
A: inflation refers that increases in the prices in an economic year here we choose the correct option…
Q: An inflation rate of 2% in the USA (calculated using the Consumer Price Index) means that: both…
A: This can be described as the concept that shows that over the period of time the price of the…
Q: If the consumer price index (CPI) says that inflation equaled 10% last year, then the chained CPI…
A: The relationship between the Consumer Price Index (CPI) and the chained CPI lies in their…
which one is correct?
QUESTION 7
-
Which of the following is not a component of the required
rate of return ?a. expected rate of inflationb. time value of money c. riskd. holding period returne. nominal returns
![](/static/compass_v2/shared-icons/check-mark.png)
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
- The index number representing the price level changes from 110 to 115 in one year and then from 115 to 120 the next year. Since the index number increases by five each year, is five inflation rate each year? Is the inflation rate the same each year? Explain your answer.The total price of purchasing a basket of goods in the United Kingdom over four years is: year 1=940, year 2=970, year 3=1000, and year 4=1070. Calculate two price indices, one using year 1 as the base year (set equal to 100) and the other using year 4 as the base year (set equal to 100). Then, calculate the inflation rate based on the first price index. If you had used the other price index, would you get a different inflation rate? If you are unsure, do the calculation and find out.Inflation rates, like most statistics, are imperfect measures. Can you identify some ways that the inflation rate for fruit does not perfectly capture the rising price of fruit?
- A fixed-rate mortgage has the same interest rate over the life of the loan, whether the mortgage is for 15 or 30 years. By contrast, an adjustable-rate mortgage changes with market interest rates over the life of the mortgage. If inflation falls unexpectedly by 3, what would likely happen to a homeowner with an adjustable-rate mortgage?Suppose you borrow $1,000 of principal that must be repaid t the end of two years, along with interest of 5 percent a year. If the annual inflation rate turns out to be 10 percent, Hint: Future value = Present value x (1 + Growth in prices), where t is the number of years evaluated. Real value of loan repayment Amount of loan x (1 + Real interest rate) Instructions: Round your responses to the nearest whole number. If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. a. What is the real rate of interest on the loan? % b. What is the real value of the principal repayment? c. Who loses, the debtor or the creditor? Debtor O CreditorAnswer the following question in detail, showing every step of calculation and EXPLAINING why something happens when it happens, use diagram if appropriate. The answers must be typed in MS Word. 1. Suppose you bought shares of a company for TK 10,000 last year, this year you sold it for TK 20,000. You are supposed to pay a 10% tax on capital gain. Explain the impact of a 100% inflation on the capital / gain profit you make.
- If ten years ago the prices of the items bought last month by the average consumer would have been much lower, then one can likely conclude that a. the aggregate price level has declined during this ten-year period b. the average rate of money growth for this ten-year period has been positive C. the average inflation rate for this ten-year period has been positive d. the aggregate price level has risen during this ten-year periodIn all of your previous problems, you examined trende that do not take inflation into account. Ba this extension, you will reproduce the analysis after adjusting the data for inflation. 11. Use the following web-site to convert the price of gasoline to inflated prices for the current year. Add these values to the table that follows. http://www.bls.govldata'inflation calculator.htm Gas Price per Gallen $1.30 $1.47 S1.14 $1.47 $1.59 $1.82 $2.32 $2.27 $3.05 S1.79 $2.73 $3.09 $3.40 Gas Price Adjasted for Inflation 2.21 2.41 Years since 2000 2 3. 237 2.47 2.14 3.22 4.15 2.44 3.62 4,03 4.71 7. 8. 10 11 12 *Whut you are going to do here is use the year 2000 as your baseline for all years. On the web- site, enter the price in the first field, always leave the second field 2000, and adjust "Has the same buying power as" to the ycar next to each price. When you click "Calculate," you will see the adjusted price. That is what you write in the last column of the table for each year. For example,…Automobile insurance policies (contracts) typically are issued every 6 months. Consider an actual case during the tail part of 2018 where a policy was worth approximately $649. In March of 2019 the issued policy is projected to be approximately $700. Note that these costs are somewhat high. What is the rate of inflation in these policies over this time period? 2. Los Angeles, CA and Atlanta, GA (ATL baby!!!) are two of the most well-known cities in the U.S. These cities are also very large (with LA being the larger of the two). Given that the number of people in the labor force was 6,827,958 (LA) and 3,097,603 (ATL), and the number of people out of work for Atlanta was 110, 713 and for LA was 285,764, what was the rates of unemployment for these two cities for December 2018? 3. Here are some data for numbers of people in the labor force for some cities in the U.S.: Columbia, SC (400,750); Jacksonville, FL (775,809); Charlotte, NC (1,343,634), and Charleston, SC (379,429). What…
- QUESTION 10 If prices grow by 2.9% every year, over 9 years, what is the total inflation rate? Write the answer in percent terms with up to two decimals (e.g., 10.22 for 10.22%, or 2.33 for 2.33%).Suppose you have $200,000 in a bank term account. You earn 5% interest perannum from this account.You anticipate that the inflation rate will be 4% during the year. However, theactual inflation rate for the year is 6%.Calculate the impact of inflation on the bank term deposit you have andexamine the effects of inflation in2. The price of natural gas has been zooming up from $4 per MMBtu on December 31, 2021 to $8 on April 30, 2022. What was the average effective rate of inflation per day over those 120 days? Hint: Your answer when compounded by 120 days should double the price. The nearest answer is: a. 0.5% b. 0.6% c. 0.7% d. 0.8% e. 0.9%
![Economics:](https://www.bartleby.com/isbn_cover_images/9781285859460/9781285859460_smallCoverImage.gif)
![Survey Of Economics](https://www.bartleby.com/isbn_cover_images/9781337111522/9781337111522_smallCoverImage.gif)
![Brief Principles of Macroeconomics (MindTap Cours…](https://www.bartleby.com/isbn_cover_images/9781337091985/9781337091985_smallCoverImage.gif)
![Essentials of Economics (MindTap Course List)](https://www.bartleby.com/isbn_cover_images/9781337091992/9781337091992_smallCoverImage.gif)
![Principles of Economics 2e](https://www.bartleby.com/isbn_cover_images/9781947172364/9781947172364_smallCoverImage.jpg)
![Economics For Today](https://www.bartleby.com/isbn_cover_images/9781337613040/9781337613040_smallCoverImage.gif)
![Economics:](https://www.bartleby.com/isbn_cover_images/9781285859460/9781285859460_smallCoverImage.gif)
![Survey Of Economics](https://www.bartleby.com/isbn_cover_images/9781337111522/9781337111522_smallCoverImage.gif)
![Brief Principles of Macroeconomics (MindTap Cours…](https://www.bartleby.com/isbn_cover_images/9781337091985/9781337091985_smallCoverImage.gif)
![Essentials of Economics (MindTap Course List)](https://www.bartleby.com/isbn_cover_images/9781337091992/9781337091992_smallCoverImage.gif)
![Principles of Economics 2e](https://www.bartleby.com/isbn_cover_images/9781947172364/9781947172364_smallCoverImage.jpg)
![Economics For Today](https://www.bartleby.com/isbn_cover_images/9781337613040/9781337613040_smallCoverImage.gif)