Question
2. You expect your mutual fund portfolio to yield and 8% return and anticipate inflation to be 2%.
Calculate the inflation adjusted return for your portfolio.
(1+Return)
Inflation-Adjusted Return
1
(1+Inflation Rate)
Inflation Adjusted Return
Expand
Transcribed Image Text

2. You expect your mutual fund portfolio to yield and 8% return and anticipate inflation to be 2%. Calculate the inflation adjusted return for your portfolio. (1+Return) Inflation-Adjusted Return 1 (1+Inflation Rate) Inflation Adjusted Return

Expert Answer

Want to see the step-by-step answer?

Check out a sample Q&A here.

Want to see this answer and more?

Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*

*Response times may vary by subject and question complexity. Median response time is 34 minutes for paid subscribers and may be longer for promotional offers.
Tagged in
Business
Finance

Related Finance Q&A

Find answers to questions asked by students like you.

Q: New parents wish to save for their newborn's education and wish to have $46,000 at the end of 17 yea...

A: Computation of yearly payment:Hence, the yearly payment is -$1,682.02.

Q: Using the P/E multiples approach to valuation, What is the estimated price of a stock if the firm’s ...

A: Calculation of estimated price of stock:Answer:Expected price of stock is $82.26

Q: Compute the expected return given these three economic states, their likelihoods, and the potential ...

A: Calculation of Expected Return:The expected return is 1.20%.Excel Spreadsheet:

Q: Suppose that 10 years ago you bought a home for $150,000, paying 10% as a down payment, and financin...

A: Calculation of original loan paid off:The original loan paid off is $16,572.Excel Spreadsheet:

Q: A corporate coupon bond of 7.0 percent is callable in five years for a call premium of one year of c...

A: A callable bond is one which can be redeemed before the maturity at a call price which is above the ...

Q: Please show all equations and work as needed. Make the correct answer clear. If possible, please typ...

A: Calculation of WACC of firm after leverage (effective after-tax):Answer:WACC after leverage is 15.95...

Q: Executives at Microsoft are interested to get into the drone delivery business. Since it would take ...

A: Option 1: The present value is $40 million.

Q: Guthrie Enterprises needs someone to supply it with 142,000 cartons of machine screwsper year to sup...

A: b.Calculation of Minimum Number of Cartons:The minimum number of cartons is 122,425 cartons per year...

Q: The pure expectations theory, or the expectations hypothesis, asserts that long-term interest rates ...

A: Justification:A Certificate Deposit (CD) for two years will have the similar yield as the Certificat...

Q: You borrow $7000 to help pay your college expenses. You agree to repay the loan at the end of 8 year...

A: (a) Formula:

Q: Amortization schedule Set up an amortization schedule for a $25,000 loan to be repaid in equal inst...

A: The table that shows the complete payments until the loan amount is totally paid off is known as amo...

Q: As requested, I include full question. only need answer part d) https://www.bartleby.com/questions-a...

A: Hence, WACC before debt is 10%, and is determined by multiplying cost of equity capital with weight ...

Q: Please show all equations and work as needed. Make the correct answer clear. If possible, please typ...

A: Note: Calculations are typed as requested for your convenienceThe company has issued 6 million share...

Q: You expect a share of stock to pay dividends of $1.30, $1.55, and $1.60 in each of the next 3 years....

A: Part A, B and C:Calculation of Stock Price, Dividend Yield in Year 1 and Dividend Yield at the start...

Q: Suppose that 10 years ago you bought a home for $150,000, paying 10% as a down payment, and financin...

A: Computation of total interest:Hence, the total interest that is paid so far is $1,980.06.

Q: What is Internal Rate of Return - Monthly Fixed Cash Flows with Reversions?  Please provide examples...

A: The internal rate of return is the one of the discounted techniques of capital budgeting which is us...

Q: I am struggling with this problem as well and how to approach setting it up in excel. I'm using the ...

A: Initial Investment of New Product = Decrease in Firm’s FCFs of Current Year = $36 MillionCash Flow o...

Q: If you disounted a set of positive real cash flows with a nominal discount rate and inflation were p...

A: Justification:Suppose the positive cash flows are discounted with the inflation rate, which is posit...

Q: A couple plans to save for their child's college education. What principal must be deposited by the ...

A: Present value can be defined as the amount which is to be set aside in order to have a pre-defined s...

Q: Explain how financial institutions serve the needs of consumers, small businesses, and corporations....

A: Role of financial institutions (FIs):FIs play a crucial role in economy. They make financial transac...

Q: Suppose that 10 years ago you bought a home for $150,000, paying 10% as a down payment, and financin...

A: Calculation of Interest Paid over the New Loan:The interest paid over the new loan is $137,184.85.Ex...

Q: Optimal corporation wants to expand their manufacturing facilities. They have two choices, first to ...

A: It is given that firm must incur $290,000 for two years, if it chooses option 1. The second option i...

Q: Optimal corporation wants to expand their manufacturing facilities. They have two choices, first to ...

A: 1. The net present value of option 1:Computation of net present value:Hence, the net present value i...

Q: Atlantic Corporation is the largest logging company in the north eastern part of the United States. ...

A: As per dividend discout model, intrinsic price of the stock = D1 / (Ke - g)where D1 = Expected annua...

Q: Optimal corporation wants to expand their manufacturing facilities. They have two choices, first to ...

A: a)Determine the best option:The most financially beneficial option is option 1 expansion of current ...

Q: What is calculation of before Tax (Equity) Cash Flow?  Please provide example.

A: The cash flow, which is generated by an investment after deducting all payments of all expenses from...

Q: MMS Corp borrows $1,650,000 today for a new building. The loan is an equal principal payment loan wi...

A: Calculation of Current Portion of Debt in Month 16:The current portion of month debt 16 is $183,333....

Q: What is calculation of Outstanding Mortgage Balance (Repayment of Mortgage)?  Please provide example...

A: Outstanding Mortgage Balance refers the loan outstanding at any point in time after the loan has bee...

Q: If an investor wanted to grow a continuously compounded investment of $1000 to $1250 in 3 years, wha...

A: Computation of rate of interest:

Q: At age 18, Marcia started depositing $2000 per year at the end of each year into an account earning ...

A: Annuity, A = $ 2,000Rate of interest = r = 12%number of annuities, n = 8

Q: You own a furniture manufacturing company. You are looking to expand into glass furniture and need t...

A: Calculation of ARR:The ARR for Machine 1 is 28.89% and Machine 2 is 32.73%.Excel Spreadsheet:

Q: A manager has determined that a potential new product can be sold at a price of $50 each. The cost t...

A: Selling Price = $50Variable Cost (Production Cost of Product) = $35Fixed Cost (Lease of necessary eq...

Q: what is the formula for compounding interest?

A: Compound interest can be defined as the interest earned on principal amount and on all previous inte...

Q: Consider the following annual returns of Molson Coors and International Paper:    MolsonCoors Int...

A: The average return, standard deviation and coefficient of deviation are calculated to select the com...

Q: Part 1: The CFO of Cruz, inc. is considering Projects A and B which are considered equally risky; th...

A: As per Q&A guidelines, we should answer the first three subparts when multiple subparts given un...

Q: H M 9Ro-a s re raa troese db ato a6411 6alo 5a,1908ecrcase 6. Lonnie needs extra money to buy a truc...

A: Calculate the interest amount as follows:

Q: Global Internet company is looking to expand their operations. They are evaluating their cost of cap...

A: Part a & b:Calculation of Cost of Capital:a. The cost of capital is 9.09%.b. The cost of capital...

Q: Questions are on image

A: (1)Computation of closing stock and cost of goods sold is as follows:Calculation:Therefore, the valu...

Q: Consider the following table, which gives a security analyst's expected return on two stocks for two...

A: Expected rate of return can be described as the summation of all likely return on the investment wit...

Q: A preferred stock from Hecla Mining Co. (HLPRB) pays $5.00 in annual dividends.   If the required re...

A: The preferred stocks are the stocks on which preference is given to the stockholder while distributi...

Q: You would Ilike to have $59,000 in 5 years for the down payment on a new house following graduation ...

A: Note: No intermediate rounding is done, only the answer is rounded off to nearest whole number.a) Do...

Q: A stock has yielded returns of 6 percent, 11 percent, 14 percent, and -2 percent over the past four ...

A: The formula to calculate mean value is given below:

Q: negative net exposure C. a fully balanced position. D. zero net exposure. 12. The levels of foreign ...

A: The levels of foreign currency assets and liabilities at banks hove increased in recent years, and t...

Q: Q2)   Suppose the current one-year euro swap rate y0[0, 1] is 1.74%, and the two-yearand three-year ...

A: Meaning of Euro swap rate:A swap rate is the fixed rate that a receiver demands, in exchange for unc...

Q: Guthrie Enterprises needs someone to supply it with 142,000 cartons of machine screwsper year to sup...

A: a) To calculate the NPV of the project, first depreciation, after tax salvage value is determined an...

Q: I f Topic 2: Linear Equations AT 9. A passbook savings account has a rate of 6%, Find the effective ...

A: Calculate the effective annual rate as follows:

Q: Why are credits and debits different for banks compared for personal finance usage?

A: In personal account, all expenses, assets, and losses will be debited. All incomes, liabilities, and...

Q: A share of common stock has just paid a dividend of $3.00.  If the expected long-run growth rate for...

A: The market value of the stock is the current stock price in the market at which the trading of the e...

Q: You are a management trainee in one of the Manufacturing companies based in Johor, Malaysia. The com...

A: Value of the firm:Value of the firm is measured by using sum of value of firm’s equity and its debt....

Q: Can someone please just give me the right answer to the right decimal places for the last part, "How...

A: Calculation of interest was earned during the third quarter of the 4th year:The interest was earned ...