The nominal rate equals the real rate plus the inflation rate. True False

Q: If there is inflation how does this affect LIFO reserves? Does it increase or decrease it?

A: LIFO Last-in-first out is a method used to issue material. It is a method of pricing the issues of…

Q: Compare and contrast dollar returns and rates of return.

A: The returns from any investment can be calculated in terms of value (amount terms) or percentages.

Q: Using the formula Interest = Principal x Rate x Time, if all elements are known except for the…

A: Simple interest rate is most easy and quick method method of interest calculation. Simple interest…

Q: Relationship of monetary policy to inflation

A: Inflation: Inflation is defined as a situation in which the general price level of the economy rises…

Q: According to the single index model, the inflation risk is an example of the:

A: Single Index Model is the type of an asset pricing model which determines the returns on security…

Q: hOW DO YOU CALCULATE MARR in real terms? (Adjusted for inflation)

A: Minimum Acceptable Rate of Return (MARR) is made to ascertain the economic attractiveness of the…

Q: Explain the 2 ways to look at inflation ( Inflation rate & Price indices)

A: Inflation has thrown countries into protracted periods of insecurity. The inflation is the rate…

Q: In a complete sentence give an example of something that has been affected by inflation.

A: In finance inflation is the rate of increase in prices of goods and services over a time period. An…

Q: Nominal values are measured in ________ and real values take account of

A: Given  Nominal values are measured ? Real values taken account of?

Q: The effective interest rate over this period equals ...

A: Effective Interest Rate: It refers to the annual rate of interest which takes into account the…

Q: did real estate returns exceed the rate of inflation?

A: Answer: Introduction: An analysis of real estate investment is a process of determining to what…

Q: Real rates are defined as nominal rates that have been adjusted for inflation. Select one: True…

A: Nominal interest rate is the amount of rate paid to lendor for the use of money

Q: How does a high rate of inflation affect money in all its different roles?

A: Inflation: Inflation is a rate at which the price of the products and services rises. It frequently…

Q: Which of the following statements is true about the present value factors? The present value factor…

A: Present value interest factor is used to determine the present value of series of future annuities.…

Q: Repeat the problem above, considering an inflation of 4.0%. How does inflation affect the results of…

A: Here, Purchase price = $25,000 Taking Discount: Discount = $2,000 No. of months = 48 months APR =…

Q: Which of the following is not needed to compute the present value of an investment?a. The length of…

A: Present value:   Present value refers to the present worth of the money that is received in future…

Q: Explain the term equivalent nominal annual rate (ENAR),?

A: The question is based on the concept of effective annual interest rate, which is calculated with…

Q: (Click on the following icon e in order to copy its contents into a spreadsheet.) Approximate True…

A: Approximate Real Rate = Nominal Rate - Inflation Rate True Real Rate = [ (1+Nominal rate) /…

Q: A quoted rate of interest is a “nominal” rate because it includes inflation expectations. a) True…

A: Answer:-   True. The nominal interest rate comprises of the real interest rate and a premium for…

Q: If the interest rate is zero, the future value interest factor equals

A: Interest rate of zero percent results in no compounding.

Q: Which of the following statements is true about the present value factors? a. The present value…

A: Option c>> The present value factor is also known as the discount factor.  Is correct  Present…

Q: The elasticity of the change of the price of debt toward the change in interest rate is the absolute…

A: Duration is a measure of the sensitivity of the price of a bond or other debt instrument to a change…

Q: __________ is the interest rate that makes NPV equal to zero when it is used as the discount rate

A: Net present value is the sum of values discounted of cash flows less the amount of initial cost.…

Q: What effect does inflation typically have on the EOQ?

A: Economic order quantity (EOQ) is the optimal purchasing order number to keep stock costs, such as…

Q: The _______ models the relationship between inflation rate, nominal return, and real return.…

A: Fisher effect: states that nominal rate is equal to real interest rate plus inflation.

Q: The real rate of return is related to O The risk-free rate The risk-free and the inflation rate The…

A: Real rate of returnAn annual profit percentage that is earned on the investment, being adjusted for…

Q: As long as the inflation rate is positive, the nominal rate of return on a security will be the real…

A: Let the inflation rate = i Nominal rate = n Real rate = r

Q: Inflation, nominal interest rates, and real rates. Given the following information, . estimate the…

A: The computation of Approximate Real rate as follows: Approximate Real Rate = Nominal Rate -…

Q: Why inflation is considered and have effect in present value?

A: Inflation is the increase in the general price level of the country. It is an important indicator of…

Q: Which of the following statements is true?a. When the interest rate increases, the present value of…

A: Identify the statement which is true:

Q: Which one of the following statements is correct?    Real rates must exceed inflation rates.    Real…

A: Real interest rate= Nominal interest rate - Inflation rate In real interest rate, the effect  of…

Q: How would an increase in the interest rate or a decrease in the number of periods until the payment…

A: Interest rate is defined as an amount of an interest due per period as the proportion of amount,…

Q: In an inflationary period, what is the difference between (a) inflated dollars and “then-current”…

A: Inflation is the rate at which goods and services cost rates increment. On the off chance that…

Q: Which one of the following statements is correct? A. Real rates must exceed inflation rates. B.…

A: Meaning of the terms: Real rates: Real rate=Nominal rate - Inflation . So, real rates consider…

Q: Which of the following is true about Interest Rate? i. The Fisher Effect illustrates the positive…

A: Interest rate refers to the amount of money that a financial institution or money lender receives…

Q: The interest rate (i) is assumed to be a compound rate, unless specifically stated as simple…

A: There are 2 types of interest rates are used in the financial transactions. one is simple interest…

Q: What is the basic accounting problem created by the monetary unit assumption when there is…

A: The Financial Accounting Standards Board (FASB) is known as the is private, non-profit organization…

Q: Inflation is a general rise in market prices that affects all goods equally. OA. True OB. False

A: Market prices refer to the prices that are prevailing in the market of goods and services. It is…

Q: This rate is included in the face of the note:     stated rate market rate effective interest yield…

A: Rate of the note determine the payment amount in form of interest to the holder. Interest payment is…

Q: Why do the prices of fixed-rate bonds fall if expectations for inflation rise?

A: Bond is financial security used by organizations to raise debt funds. Bond carries fixed coupon that…