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Assume a nominal discount rate of 9% and a 2% forcasted inflation rate .Calculate real discount rate
Please include formula.
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- Suppose the real rate is 3.5 percent and the inflation rate is 2 percent. What rate would you expect to see on a Treasur bill? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g 32.16.)What is the (exact) nominal return on an investment that earns a real return of 14.7% while inflation is 7.4%? Enter your response, in percent (%), correct to TWO decimal places.What is the real interest rate given a nominalrate of 8.4%, and an inflationrate of 2.0%
- If Treasury bills are currently paying 3.05 percent and the inflation rate is 1.89 percent, what is the approximate real rate of interest? The exact real rate? Can the calculator and excel solution be provided?suppose the real intrest rate is 2.5% and the inflation rate is 7% . what is the nominal intrest rate?What exact real rate of return is implied by a nominal return of 6% and an inflation rate of 2.4% over the same time period?(please write answer in a decimal format using 5 decimal places)
- (Trade Credit Discounts) Determine the effective annualized cost of forgoing the trade credit discount on the following terms: 1/10, net 20 2/10, net 30 Common Stock A Common Stock B Probability Return Probability Return .30 11% .20 25% .40 15% .30 6% .30 19% .30 14% .20 22%What would you expect the nominal rate of interest to be if the real rate is 5.3 percent and the expected inflation rate is 2.8 percent?Suppose the real rate is 3.1 percent and the inflation rate is 4.7 percent. What rate would you expect to see on a Treasury bill?
- You observe a nominal rate of 5.48% at the same time you learn that the inflation rate is 2.68%. What is the real rate, given this information?Assume the nominal interest rate is 12 percent and the expected rate of inflation is 8 percent. Calculate real rate of interest. Now assume instead that the nominal interest rate is 4 percent and the expected rate of inflation is minus 2 percent. Calculate the real rate of interest. Assume the expected rate of inflation is 6 percent per year. What nominal interest rate should you charge to receive a real interest rate of 2 percent per year?Suppose 1-year T-bills currently yield 7.00% and the future inflation rate is expected to be constant at 2.00% per year. What is the real risk-free rate of return, r*? The cross-product term should be considered , i.e., if averaging is required, use the geometric average. (Round your final answer to 2 decimal places.)
