The level of the Syldavian market index is 21,300 at the start of the year and 25,800 at the end. The dividend yield on the index is 4.8%. a. What is the return on the index over the year? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Return % b. If the interest rate is 6%, what is the risk premium over the year? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Risk Premium c. If the inflation rate is 8%, what is the real return on the index over the year? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) % Real Return
The level of the Syldavian market index is 21,300 at the start of the year and 25,800 at the end. The dividend yield on the index is 4.8%. a. What is the return on the index over the year? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Return % b. If the interest rate is 6%, what is the risk premium over the year? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Risk Premium c. If the inflation rate is 8%, what is the real return on the index over the year? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) % Real Return
Chapter8: Analysis Of Risk And Return
Section: Chapter Questions
Problem 17P
Related questions
Question
Transcribed Image Text:The level of the Syldavian market index is 21,300 at the start of the year and 25,800 at the end. The dividend yield on the index is
4.8%.
a. What is the return on the index over the year? (Do not round intermediate calculations. Enter your answer as a percent rounded
to 2 decimal places.)
Return
%
b. If the interest rate is 6%, what is the risk premium over the year? (Do not round intermediate calculations. Enter your answer as a
percent rounded to 2 decimal places.)
Risk Premium
c. If the inflation rate is 8%, what is the real return on the index over the year? (Do not round intermediate calculations. Enter your
answer as a percent rounded to 2 decimal places.)
%
Real Return
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Recommended textbooks for you
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Intermediate Financial Management (MindTap Course…
Finance
ISBN:
9781337395083
Author:
Eugene F. Brigham, Phillip R. Daves
Publisher:
Cengage Learning
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Intermediate Financial Management (MindTap Course…
Finance
ISBN:
9781337395083
Author:
Eugene F. Brigham, Phillip R. Daves
Publisher:
Cengage Learning
Pfin (with Mindtap, 1 Term Printed Access Card) (…
Finance
ISBN:
9780357033609
Author:
Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher:
Cengage Learning
