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)
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- The expected inflation rate is 8%. If the current real rate of interest is 4%, what should the nominal rate of interest be? Use two decimal places – show workWhat 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 would you expect the nominal rate of interest to be if the real rate is 3.8percent and the expected inflation rate is 6.8 percent? The nominal rate of interest would be ______%. (Round to two decimal places.)
- 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?Please answer quickly and correctly Suppose that the general inflation rate is 3% and the real interest rate is 5%. Find the market interest (aka combined) rate (%, to the nearest hundredth).Suppose we observe the 3-year Treasury security rate (1R3) to be 8 percent, the expected 1-year rate next year—E(2r1)—to be 4 percent, and the expected one-year rate the following year—E(3r1)—to be 6 percent. If the unbiased expectations theory of the term structure of interest rates holds, what is the 1-year Treasury security rate, 1R1? (Round your answer to 2 decimal places.)
- (Inflation and Interest rates) What would you expect the nominal rate of interest to be if the real rate is 4.1 percent and the expected inflation rate is 6.6 percent ? The nominal rate of interest would be ____ % (Round to two decimal places.)What is the real interest rate given a nominalrate of 8.4%, and an inflationrate of 2.0%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.)
- Assume inflation is 0.16% per month. Would you rather earn a nominal return of 0.79% per month, compounded monthly, or a real return of 6.48% APR, compounded annually? (Note: Be careful not to round any intermediate steps less than six decimal places.) The annual rate for the nominal return of 0.79% per month is _____. (Type your answer in decimal format. Round to six decimal places.) Part 2 The nominal annual rate for the real return of 6.48% APR is _____. (Type your answer in decimal format. Round to six decimal places.) Part 3 (Select from the drop-down menus.) Based on a comparison of the two rates and the current inflation rate, you would prefer the (real return or nominal return) option over the (real return or nominal return) option.Nominal rates are currently 6.75%, and the estimate of expected inflation is 4.23%. Use the (precise) Fisher relationship to estimate the real rate prevailing in the economy.Assume that expected rates of inflation over the next 5 years are 4 percent, 7 percent, 10 percent, 8 percent, and 6 percent, respectively. What is the average expected inflation rate over this 5-year period? Group of answer choices 6.5% 7.5% 8.0% 6.0% 7.0%