You put up $50 at the beginning of the year for an investment. The value of the investment grows 6% and you earn a dividend of $2.50. Your HPR is a. 8% b. 6% c. 9% d. 11%
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You put up $50 at the beginning of the year for an investment. The value of the investment grows 6% and you earn a dividend of $2.50. Your HPR is
Which of the following statement about inflation is incorrect
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- Fixed Income Course - This is all one question. The following questions are about TIPS.a. What is meant by the “real rate”?b. What is meant by the “inflation-adjustedprincipal”?c. Suppose that the coupon rate for a TIPS is3%. Suppose further that an investor purchases$10,000 of par value (initial principal) of thisissue today and that the semiannual inflationrate is 1%.1. What is the dollar coupon interest thatwill be paid in cash at the end of the firstsix months?2. What is the inflation-adjusted principal atthe end of six months?3. Assume that the economy has an annual inflation rate of 5 percent. Are the followinginvestments profitable in real terms?(a) A $1,000 face-value bond, which you purchase at a 30% discount, that pays a monthly coupon of $4. (b) A $1 million house the increases in price by $45,000 per year. You do not rent outthe house, nor do you undertake renovations. (c) A $1 million house that you renovate for $45,000 over the course of a year, causingthe price to increase to $1.1 million.An investment offers a total return of 11 percent over the coming year. Janice Yellen thins the total real return on this investment wil be only 7 percent. What does Janice believe the inflation rate will be ove the next year? (Do not ronudn intermediate calcculation and enter your answer as a percent rounded to 2 decimal place, e.g., 3216)
- An investment offers a total return of 12 percent over the coming year. Janice Yellen thinks the total real return on this investment will be only 8 percent. What does Janice believe the inflation rate will be over the next year? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)Say you own an asset that had a total return last year of 17 percent. Assume the inflation rate last year was 4.8 percent. What was your real return? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)Your business manager forwards the following information to you. Your businesses earned a real rate of return of 7.6% last year and inflation for the same period was 9.6%. What was your nominal rate of return using the Fisher Effect? (Note: nominal rates of return can be positive or negative.) (Round to 100th of a percent and enter as a percentage, e.g. 12.34% as 12.34.)
- An investment had a nominal return of 10.6percent last year. If the real return on investment was only 6.3 percent, what was the inflation rate for the year? a. 17.57% b. 3.89% c. 10.73% d. 4.49%If an investment grew by 9% while it had a change in purchasing power of 7%, what was the inflation rate over the period? (Convert your answer to a percent but enter numbers only in your response.)The level of the Syldavian market index is 23,000 at the start of the year and 27,500 at the end. The dividend yield on the index is 5.5%. 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.) If the interest rate is 8%, what is the risk premium over the year? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) If the inflation rate is 9%, 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.)
- ASAP Assume that investing $ 1,000 entitles you to a ten-year cash flow thatyields $ 100 the following year and grows at an annual rate of 3% since then (Xk = 100 (1.03)k-1 , k = 1,. . . , 10). A) Determine the present values of cash flow for nominal interest rates of 1%, 2%. B) what is internal rate of return on cash flow?a) You invest 155 000 TL for a year. At the end the year, you have 174 375 TL net in your account. If the inflation realizes at %10 fot this year, calculate real rate of return? Can real interest rates be negative? Give a simple example?Assume that the Inflation is predicted to have an average of 5% over the next 6 years. A company invests money with a return rate of 7.8%. Determine the following: a. How much money the company needs to invest today to have $500,000 actual dollars in 6 years. b. The value in today's money of the $500,000 that the company will have in 6 years.