Consider the following information on large-company stocks for a period of years

Question

Consider the following information on large-company stocks for a period of years. Required: What was the arithmetic average annual return on large-company stocks in nominal terms? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).) Nominal return What was the arithmetic average annual return on large-company stocks in real terms? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).) Real return

Explanation / Answer

Nominal Return = Return on large company stock = 14.5%
Real Return =((1+ Nominal Return)/(1+ infation) )- 1
Real Return =((1+12.7%)/(1+4.4%))-1 = 7.95%

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.