You know that the stated rate of return is not what you really earned. If the inflation rate last year was 4.5%, and your investment had a stated rate of 18%, 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.) Real return %

You know that the stated rate of return is not what you really earned. If the inflation rate last year was 4.5%, and your investment had a stated rate of 18%, 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.) Real return %

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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What 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.
Please compute Payback Period, Net Present Value (NPV) and Internal Rate of Return (IRR). For Payback Period, provide your answer to the nearest two decimal places (X.XX) -- do not write 'years' or 'yrs' please. For NPV, please indicate the whole dollar value with proper commas -- do not use dollar signs. For IRR, list the percentage to the nearest two places (X.XX%) and include the percent sign. Thank you for the help!
Ⓡ Suppose the returns on a particular asset are normally distributed. Also suppose the asset had an average return of 11.1% and a standard deviation of 23.4%. Use the NORMDIST function in Excel to determine the probability that in any given year you will lose money by investing in this asset. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.): Probability %
Say you own an asset that had a total return last year of 11.5 percent. If the inflation rate last year was 6.5 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.) Real return % ( Prev 7 of 10 Next
ok Assume the returns from holding an asset are normally distributed. Also assume the average annual return for holding the asset a period of time was 15.4 percent and the standard deviation of this asset for the period was 33.3 percent. Use the NORMDIST function in Excel to answer the following questions. a. What is the approximate probability that your money will double in value in a single year? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 3 decimal places, e.g., 32.161. b. What is the approximate probability that your money will triple in value in a single year? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 8 decimal places, e.g., 32.16161616. ences a. Probability b. Probability % %
Accounting for Fair Value Hedge: Interest Rate Swap On January 1 of Year 1, Innovative Lab issued a 4-year $50,000 note to a local bank with fixed interest payments based on 6%, payable annually on December 31. To hedge the risk of a fixed interest payment, Innovative Lab entered into a 4-year interest rate swap agreement on January 1 of Year 1, calling for interest payments tied to a designated benchmark interest rate to a counterparty and receipt of interest based on 6%, negotiated at a notional amount of $50,000. The settlement date for the net cash payment is on December 31 of each year. The following table provides additional information related to the interest rate swap as forecasted over the next 4 years. Fair value: Interest rate swap Fair value: note payable Benchmark interest rate Required Dec. 31, Year 1 Dec. 31, Year 2 Dec. 31, Year 3 Dec. 31, Year 4 $200 $0 $50,200 4.2% $400 $50,400 4.0% $0 $50,000 5.2% $50,000 5.8% a. Record the required journal entries for Year 1, Year…
es Suppose the returns on an asset are normally distributed. The historical average annual return for the asset was 5.7 percent and the standard deviation was 18.3 percent. a. What is the probability that your return on this asset will be less than -4.1 percent in a given year? Use the NORMDIST function in Excel® to answer this question. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What range of returns would you expect to see 95 percent of the time? (Enter your answers for the range from lowest to highest. A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) c. What range of returns would you expect to see 99 percent of the time? (Enter your answers for the range from lowest to highest. A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter…
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.)
1. Accounting rate of return. 2. Payback period. 3. Net present value. 4. Without making any calculations, determine whether the IRR is more or less than 14%.
(Computing rates of return) From the following price data, compute the annual rates of return for Asman and Salinas. Asman Salinas $10 $30 12 28 11 32 13 35 Time 1234 3 4 How would you interpret the meaning of the annual rates of retur? The rate of return you would have eamed on Asman stock from time 1 to time 2 is%. (Round to two decimal places.) The rate of return you would have earned on Asman stock from time 2 to time 3 is%. (Round to two decimal places.) The rate of return you would have eamed on Asman stock from time 3 to time 4 is%. (Round to two decimal places.) The rate of return you would have earned on Salinas stock from time 1 to time 2 is%. (Round to two decimal places.) The rate of return you would have earned on Salinas stock from time 2 to time 3 is %. (Round to two decimal places.) The rate of return you would have earned on Salinas stock from time 3 to time 4 is %. (Round to two decimal places.)
Classify the following event as mostly systematic, mostly unsystematic: "Short-term interest rates increase unexpectedly" a. Systematic b. Unsystematic Calculate the arithmetic mean return of the following returns Date Return 11/01/2018 9.25% 11/14/2018 6.51% 12/01/2018 -4.61% 12/14/2018 9.14% NOTE: Enter the PERCENTAGE number rounding to two decimals. If your decimal answer is 0.034576, your answer must be 3.46. DO NOT USE the % sign
The formula for calculating the discount rate to use in net present value (NPV) calculations is as follows PV = 1+ (1+r)" Where 'r represents: OA. The number of years you are investing B. The initial investment OC. The number of years - stated as a decimal D. The cost of capital stated as a decimal

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