Question

Say you own an asset that had a total return last year of 11.4 per o. Nominal versus Real Returns If the inflation rate last year was 3.9 percent, what was your real return?

please show all work

0 0
Add a comment Improve this question Transcribed image text
Answer #1

Nominal return = R = 11.4%

Inflation = h = 3.9%

Using Fishers Equation

(1+real rate) = (1+R)/ (1+h)

r= Real rate = (1+0.114)/(1+0.039) -1

=7.22%

Add a comment
Know the answer?
Add Answer to:
please show all work Say you own an asset that had a total return last year...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT