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Chrome File Edit View History Bookmarks People Window Help * 100 Thu 11:57 PM Hassan Alsaihati QE D Assignment Results G Home l Chegg.com Hassan × c o D ezto.mheducation.com/hm.tpx?todospostSubmissionview :: Apps UWM-, hotmail A ALEKS DI MathwayPEX Expedia . CR EagleRider Rentals AT&T; Pay Onlir at ·VIP () DWileyPLUS OjuJ Principles of Finance 350: Fall 2017-001 HASSAN ALSAIHAI FINANCE Assignment 8- GRADED instructions I help Score: 4/6 Points 66.67% Question 3 (of 6) Return To Assignment List Award: O out of 1.00 point You did not receive full credit for this question in a previous attempt Say you own an asset that had a total returm last year of 15 percent. Assume the inflation rate last year was 3.9 percent. What was your real return? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Real return Hints eBook& Resources Hint #1 Hint #2

Explanation / Answer

This is related to fisher equation

(1+Real) = (1+nominal)*(1+inflation)

Nominal = 15% = 0.15

Inflation = 3.9% = 0.039

Real rate = (1+0.15)*(1+0.039) - 1

= 0.19485 = 19.49%

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