Please answer the following questions with the question number noted handwritten 2. Over the last nine years, you have earned the following returns on theNZXYear Return(ending in March)2013-201417.45%2014-2015 15.17%2015-2016 17.26%2016-2017 7.94%2017-2018 16.92%2018-2019 19.54%2019-2020 0.36%2020 2021 28.93%2021-2022 -5.17%You have also collected the level of the CPI over the same period:Date Level958972975March 2013March 2014March 2015March 2016March 2017March 2018March 2019March 2020March 20211068March 2022 11429791000101110261052(a) For each tax year, calculate the inflation rate.(b) Now calculate a real rate of return for the NZX50 (use the full for-mula, not the approximation) for each year.(c) What is the mean nominal return for the NZX50? What is the meanreal return?(d) What is the nominal volatility for the NZX50? What is the realvolatility of the NZX50?(e) Suppose New Zealand had a 33% tax levied on capital gains and alldividends. Repeat your analysis, calculating after-tar mean real andnominal returns, along with real and nominal after-tar volatilities.

High inflation is correlated with lower returns. Value stocks tends to perform better than growth…

Over the last nine years, you have earned the following returns on the NZX Year Return (ending in March) 2013-2014 17.45% 2014-2015 15.17% 2015-2016 17.26% 2016-2017 7.94% 2017-2018 16.92% 2018-2019 19.54% 2019-2020 0.36% 2020 2021 28.93% 2021-2022 -5.17% You have also collected the level of the CPI over the same period: Date March 2013 March 2014 March 2015 March 2016 March 2017 March 2018 March 2019 March 2020 March 2021 March 2022 Level 958 972 975 979 1000 1011 1026 1052 1068 1142 (a) For each tax year, calculate the inflation rate. (b) Now calculate a real rate of return for the NZX50 (use the full for- mula, not the approximation) for each year. (e) What is the mean nominal return for the NZX50? What is the mean real return?

Over the last nine years, you have earned the following returns on the NZX Year Return (ending in March) 2013-2014 17.45% 2014-2015 15.17% 2015-2016 17.26% 2016-2017 7.94% 2017-2018 16.92% 2018-2019 19.54% 2019-2020 0.36% 2020 2021 28.93% 2021-2022 -5.17% You have also collected the level of the CPI over the same period: Date March 2013 March 2014 March 2015 March 2016 March 2017 March 2018 March 2019 March 2020 March 2021 March 2022 Level 958 972 975 979 1000 1011 1026 1052 1068 1142 (a) For each tax year, calculate the inflation rate. (b) Now calculate a real rate of return for the NZX50 (use the full for- mula, not the approximation) for each year. (e) What is the mean nominal return for the NZX50? What is the mean real return?

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter12: Fainancial Statement Analysis

Section: Chapter Questions

Problem 83E

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