2. A bond's nominal interest rate is 8.80%. If the expected inflation rate is 2.10% and...
2. A bond's nominal interest rate is 8.80%. If the expected inflation rate is 2.10% and the realized (actual) inflation rate is 2.55%. What is the bond's real rate of return?
A. 8.35%
B. 3.70%
C. 6.25%
D. 5.80%
Homework Answers
| Bond's real rate of return = Bond's nominal rate of return - Actual inflation rate = 8.80% - 2.55% | 6.25% | Option C |
Add Answer to:
2. A bond's nominal interest rate is 8.80%. If the expected
inflation rate is 2.10% and...
1. A stock with a beta of 1.32 is expected to return 14.57% next year. If...
1. A stock with a beta of 1.32 is expected to return 14.57% next year. If the expected market return is 11.50%, what is the expected risk free rate? A. 1.90% B. 3.07% C. .61% D. 8.71% 2. A bond's nominal interest rate is 8.80%. If the expected inflation rate is 2.10% and the realized (actual) inflation rate is 2.55%. What is the bond's real rate of return? A. 8.35% B. 3.70% C. 6.25% D. 5.80%
Suppose the nominal interest rate equals 9%, the expected inflation rate is 5%, and actual inflation...
Suppose the nominal interest rate equals 9%, the expected inflation rate is 5%, and actual inflation turns out to be 3%. In this case, the: a. ex ante real interest rate is 4%. b. ex post real interest rate is 4%. C. ex ante real interest rate is 6%. d. ex post real interest rate is 2%
If a lender charge a 9% nominal interest rate and expected inflation rate is a 4%,...
If a lender charge a 9% nominal interest rate and expected inflation rate is a 4%, what is the difference between the real rate the lender received and the real rate the lender expected when the actual inflation ended up being 2%
Suppose that a lender's desired real rate of interest is 2%, the expected rate of inflation...
Suppose that a lender's desired real rate of interest is 2%, the expected rate of inflation is 2% and the actual rate of inflation is 4%: a) What's the nominal rate of interest? b. What's the actual rate real rate of interest? Explain who benefits from expectations error--the lender or the borrower.
Suppose the nominal interest rate is 0.04, the expected inflation rate is 0.025, and the expected...
Suppose the nominal interest rate is 0.04, the expected inflation rate is 0.025, and the expected real after-tax interest rate is 0.005. What is the tax rate on interest income?
Suppose the real interest rate is 3% and expected inflation is 3%, what is the nominal...
Suppose the real interest rate is 3% and expected inflation is 3%. What is the nominal interest rate?nominal interest rate: = _______ %All else equal, if inflation decreases by 0 %, what will happen to the nominal interest rate?The real interest rate will decrease by 0 %.The nominal interest rate will decrease by 0 %.The nominal interest rate will increase by 0 %.The real interest rate will increase by 0 %.What do economists call the relationship between the nominal interest...
the nominal interest rate is 7.90% and the expected inflation is 2.96% . what is the...
the nominal interest rate is 7.90% and the expected inflation is 2.96% . what is the implied real rate of interest
If the nominal interest rate is 2% and the real interest rate is 1%, inflation is:...
If the nominal interest rate is 2% and the real interest rate is 1%, inflation is:A. -1 %.B. 0 %C. 1 %.D. 2 %.
3) The nominal interest rate is 10%, the expected inflation rate is 5%, and the combined...
3) The nominal interest rate is 10%, the expected inflation rate is 5%, and the combined state-federal tax rate is 30%. The expected after-tax real interest rate is A) 1.50%. B) 2.00% C) 3.50% D) 6.50%. 4) Desired national saving would increase unambiguously if there were A) an increase in both current output and expected future output. B) an increase in both expected future output and government purchases. C) an increase in both expected future output and the expected real...
Given the nominal interest rate of 18% and the expected inflation of 15% then the value...
Given the nominal interest rate of 18% and the expected inflation of 15% then the value of the real interest rate %. With the real interest rate equal to 3% and the expected flat on equal to 4%, then the value of the nominal interest rate is A lender prefers a real interest rate while a borrower prefers a % real interest rate
Suppose the nominal interest rate equals 9%, the expected inflation rate is 5%, and actual inflation turns out to be 3%. In this case, the: a. ex ante real interest rate is 4%. b. ex post real interest rate is 4%. C. ex ante real interest rate is 6%. d. ex post real interest rate is 2%
3) The nominal interest rate is 10%, the expected inflation rate is 5%, and the combined state-federal tax rate is 30%. The expected after-tax real interest rate is A) 1.50%. B) 2.00% C) 3.50% D) 6.50%. 4) Desired national saving would increase unambiguously if there were A) an increase in both current output and expected future output. B) an increase in both expected future output and government purchases. C) an increase in both expected future output and the expected real...
Given the nominal interest rate of 18% and the expected inflation of 15% then the value of the real interest rate %. With the real interest rate equal to 3% and the expected flat on equal to 4%, then the value of the nominal interest rate is A lender prefers a real interest rate while a borrower prefers a % real interest rate
Most questions answered within 3 hours.
-
Where is the error in this code sequence?
String s1 = "Hello";
String s2 = "ello";...
asked 10 months ago -
Financial data for Joel de Paris, Inc., for last year
follow:
Joel de Paris, Inc.
Balance...
asked 10 months ago -
Consider this reaction:
Al2(SO4)3 (aq)+ BaCl3
(aq) Al2Cl6 (aq)- +
3BaSO4(s) . What is the...
asked 10 months ago -
Suppose that Savneet is considering increasing her
recent random sample from 20 car rentals to 40...
asked 10 months ago -
Trucks arrive at an unloading terminal at an average rate of 120
per hour.
Trucks arrive...
asked 10 months ago -
Why are methanol and ethanol completely soluble in water while
octanol is not very little soluble....
asked 10 months ago -
A facilities manager at a university reads in a research report
that the mean amount of...
asked 10 months ago -
When the CuSO4 is rehydrated by adding water to the anhydrous
compound, is this an endothermic...
asked 10 months ago -
A ray of sunlight is passing from diamond into crown glass; the
angle of incidence is...
asked 10 months ago -
A block of mass 0.249 kg is placed on top of a light, vertical
spring of...
asked 10 months ago -
how do the kidneys compensate in the presences of acidosis
a) trigger hyperventilate
b) reserve acid...
asked 10 months ago -
Question 501 pts
The rental rate of capital to the firm increases. Which of the
following...
asked 10 months ago