You presently own stock that you purchased one year ago. Your nominal return on the stock for the past year was15%. You calculate your real return on investment as 11.50 %. According to the "Fisher Effect" formula, the rate ofinflation must have been0.23%3.50%3.14%O 7.67%O 28.00%

Fisher effect tells that how much the inflation and how much is impact inflation on interest rate.

Answered: You presently TOCK 15%. You calculate…

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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You presently TOCK 15%. You calculate your real return on investment as 11.50 %. According t inflation must have been O 0.23% 3.50% 3.14% 7.67% 39.00Kr