# Real Versus Nominal Returns. The Costaguanan stock market provided a rate of return of 95 percent. The inflation rate in Costaguana during the year was 80 percent. In the United States, in contrast, the stock market return was only 12

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1. ## Math

You want to have 1.5 million in real dollars in an account when you retire in 40 yeras. the nominal return on your investment is 11 percent and the inflation rate is 3.8 percent. What real amount must you deposit each year to achieve your goal? My answer

2. ## investment and portifolio management

At present, suppose the risk-free rate is 10 percent and the expected return on the market portfolio is 15 percent. The expected returns for four stocks are listed together with their expected betas. Stock Expected Return Beta NIC 18% 1.3 EIC 14 0.8 UIC 16

3. ## Finance

You want to have \$2million in real dollars in an account when you retire in 43 years. The nominal return on your investment in 9.939% and the inflation rate is 3.2%. What is the real amount you must deposit each year to achieve this goal?

4. ## ECON-HELP!!

1. In the Country of Wiknam, the velocity of money is constant. Real GDP grows by 5 percent per year, the money stock grows by 14 percent per year, and the nominal interest rate is 11 percent. What is the real interest rate? 2. The goverment raises taxes

5. ## math

Allen Young has always been proud of his personal investment strategies and has done very well over the past several years. He invests primarily in the stock market. Over the past several months, however, Allen has become very concerned about the stock

6. ## Finance

Carter's preferred stock pays a dividend of \$1.00 per quarter. If the price of the stock is \$45.00, what is its nominal (not effective) annual rate of return?

7. ## Math

Real Versus Nominal Returns. The Costaguanan stock market provided a rate of return of 95 percent. The inflation rate in Costaguana during the year was 80 percent. In the United States, in contrast, the stock market return was only 12 percent, but the

8. ## fiance

You want to create a \$75,000 portfolio comprised of two stocks plus a risk-free security. Stock A has an expected return of 13.6 percent and stock B has an expected return of 11.4 percent. You want to own \$30,000 of stock B. The risk-free rate is 4 percent

9. ## statistics

An investment broker reports that the yearly returns on common stocks are approximately normally distributed with a mean return of 12.4 percent and a standard deviation of 20.6 percent. On the other hand, the firm reports that the yearly returns on

You want to have \$6 million in real dollars in an account when you retire in 40 years. The nominal return on your investment is 13 percent and the inflation rate is 5.1 percent. What real amount must you deposit each year to achieve your goal?

11. ## math/stock

You want to create a \$75,000 portfolio comprised of two stocks plus a risk-free security. Stock A has an expected return of 13.6 percent and stock B has an expected return of 11.4 percent. You want to own \$30,000 of stock B. The risk-free rate is 4 percent

12. ## Finance Challenge

The new RDS project is somewhat riskier than a typical project for DEI, primarily because the plant is being located overseas. Management has told you to use an adjustment factor of 3 percent to account for this increased riskiness. Calculate the

13. ## math

A bond has an average return of 6.8 percent and a standard deviation of 4.6 percent. What range of returns would you expect to see 68 percent of the time? a. 2.2 percent to 11.4 percent b. 4.6 percent to 11.4 percent c. 4.6 percent to 22.8 percent d. 11.4

14. ## investment

Would you expect the required rate rate of returns for a U.S investor in U.S common stocks to be the same as the required rate of return on Japanese common stocks? what factors would determine the require rate of return for stocks in these countries?

15. ## finance

10. A firm has a beta of 1.2. The market return equals 14 percent and the risk-free rate of return equals 6 percent. The estimated cost of common stock equity is _____ percent. (Please calculate the arithmetic solution and show your work)

16. ## maths

Allen Young has always been proud of his personal investment strategies and has done very well over the past several years. He invests primarily in the stock market. Over the past several months, however, Allen has become very concerned about the stock

17. ## AP Macroeconomics

3. You buy a certificate of deposit (CD) that pays a nominal rate of 12% annually. You have a tax rate of 25%, so if the interest on this CD is taxable (which it may not be) your after-tax nominal rate is (1 ñ 25%) • 12% = 9%. Since 10% equals .1, we

18. ## finance

Julie's X-Ray Company paid \$2.00 per share in common stock dividends last year. The company's policy is to allow its dividend to grow at 5 percent for 4 year and then the rate of growth changes to 3 percent per year from year 5 and on. What is the value of

19. ## Finance

Hooks Athletics, Inc., has outstanding a preferred stock with a par value of \$30 that pays a dividend of \$2.50. The preferred stock is redeemable at the option of the stockholder in 10 years at a price equal to \$30. The stock may be called for redemption

20. ## Math

Real Versus Nominal Returns. The Costaguanan stock market provided a rate of return of 95 percent. The inflation rate in Costaguana during the year was 80 percent. In the United States, in contrast, the stock market return was only 12 percent, but the

21. ## STRATEGIC MANAGEMENT

6. At present, suppose the risk-free rate is 10 percent and the expected return on the market portfolio is 15 percent. The expected returns for four stocks are listed together with their expected betas. Stock Expected Return Beta NIC 18% 1.3 EIC 14 0.8 UIC

22. ## Finance

Calculate the required rate of return for Mercury Inc. to the nearest .1 Assume that investors expect a 3.0 percent rate of inflation in the future. The real risk-free rate is equal to 5.8 percent and the market risk premium is 9.3 percent. Mercury has a

You want to have \$6 million in real dollars in an account when you retire in 40 years. The nominal return on your investment is 13 percent and the inflation rate is 5.1 percent. What real amount must you deposit each year to achieve your goal?

24. ## Finance

You want to have \$5 million in real dollars in an account when you retire in 40 years. The nominal return on your investment is 12 percent and the inflation rate is 5 percent. What real amount must you deposit each year to achieve your goal?

25. ## Economics

If the velocity of circulation is constant, real GDP is growing at 3 percent a year, the real interest rate is 2 percent a year, and the nominal interest rate is 7 percent a year. a)What is the inflation rate? b)What is the growth rate of money? c)What is

If Naomi invests in a stock portfolio, her returns for 10 or more years will average 10%-12%. Naomi realizes that the stock market has higher returns because it is a more risky investment than a savings account or a CD. She wants her calculations to be

#3 of case study: If Naomi invests in a stock portfolio, her returns for 10 or more years will average 10%-12%. Naomi realizes that the stock market has higher returns because it is a more risky investment than a savings account or a CD. She wants her

28. ## Finance

A stock has an expected return of 10 percent, the risk-free rate is 6 percent, and the market risk premium is 5 percent. The beta of this stock must be . Note that the market risk premium is given.

29. ## Corporate Finance

5.Capital Co. has a capital structure, based on current market values, that consists of 21 percent debt, 9 percent preferred stock, and 70 percent common stock. If the returns required by investors are 10 percent, 12 percent, and 17 percent for the debt,

30. ## ECON--HELP!?!?!

1. In the Country of Wiknam, the velocity of money is constant. Real GDP grows by 5 percent per year, the money stock grows by 14 percent per year, and the nominal interest rate is 11 percent. What is the real interest rate? 2. The goverment raises taxes

31. ## ECON

CAN ANYONE PLEASE HELP// 1. In the Country of Wiknam, the velocity of money is constant. Real GDP grows by 5 percent per year, the money stock grows by 14 percent per year, and the nominal interest rate is 11 percent. What is the real interest rate? 2. The

32. ## Finance

You are provided the following information on a company. The total market value is \$40 million. The capital structure, shown here, is considered to be optimal. Accounting Value Market Value Bonds, \$1000 par, 6% coupon, 6% YTM \$10,000,000 \$10,000,000

33. ## strayer university

The Lo Company earned \$ 2.60 per share and paid a dividend of \$ 1.30 per share in the year just ended. Earnings and dividends per share are expected to grow at a rate of 5 percent per year in the future. Determine the value of the stock: A. if the required

34. ## Finance

You read in Business Week that a panel of economists has estimated that the long-run real growth rate of the U.S. economy over the next five-year period will average 3 percent. In addition, a bank newsletter estimates that the average annual rate of

35. ## math (pre-calc)

Analyzing a Stock. The beta, B of a stock represents the relative risk of a stock compared with a market basket of stocks, such as Standard and poor's 500 Index of stocks. Beta is computed by finding the slope of the line of best fit between the rate of

36. ## finance

Define the following terms and identify their role in finance: 1. Finance 2. Efficient Market 3. Primary Market 4. Secondary Market 5. Risk 6. Security 7. Stock 8. Bond 9. Capital 10. Debt 11. Yield 12. Rate of Return 13. Return on Investment 14. Cash Flow

37. ## investing

How do I find stock on margin rate of return? This is the question: Ed Delahanty purchased 500 shares of Niagara Corporation stock on margin at the beginning of the year for \$30 per share. The initial margin requirement was 55%. Ed paid 13% interest on the

38. ## math problem

Real Versus Nominal Returns. A foreign stock market provided a rate of return of 95 percent. The inflation rate in this country during the year was 80 percent. In the United States, in contrast, the stock market return was only 12 percent, but the

39. ## Math

Real Reverse Nominal Returns You purchase 100 shares of stock for \$40 a share. The stock pays a \$2 per share dividend at year-end. What is the rate of return on your investment for these end-of-year stock prices? What is your real (inflation-adjusted)

40. ## STOCKS & BONDS

The real risk-free rate of return has been estimated to be 2 percent under current economic conditions. The 30-day risk-free rate (annualized) is 5 percent. Twenty-year U.S. government bonds currently yield 8 percent. The yield on 20 year bonds issued by

41. ## finance

A stock has a beta of 2.0. A security analyst who specializes in studying this stock expects its return to be 24%. Suppose the risk-free rate is 6 percent and the market-risk premium is 10 percent. Is the stock overvalued or undervalued relative to the

42. ## Math

Real versus Nominal Returns. Do you think it is possible for risk-free Treasury bills to offer a negative nominal interest rate? Might they offer a negative real expected rate of return? For conventional treasuries, the answer to the first question is no.

43. ## Finance

You are considering buying 100 shares of TEXAS INC common stock. The common stock is expected to pay a dividend of \$2.50 a year from today; the growth rate of the dividends is 8% for two years, then level off to a constant rate of 5% per year. The

44. ## Finance

In February 2011 the risk-free rate was 4.50 percent, the market risk premium was 7.00 percent, and the beta for Dell stock was 1.50. What is the expected return that was consistent with the systematic risk associated with the returns on Dell stock

The market’s required return on Gitche Gumee Oil Company stock is currently 13.8 percent. If the expected return on the market portfolio is 12.6 percent and the risk-free rate is 3.5 percent, what is the beta of Gitche Gumee stock?

46. ## Finance

The Joseph Company has a stock issue that pays a fixed dividend of \$3.00 per share annually. Investors believe the nominal risk-free rate is 4 percent and that this stock should have a risk premium of 6 percent. What should be the value of this stock? TO

47. ## Finance

Universal Laser, Inc., just paid a dividend of \$3.30 on its stock. The growth rate in dividends is expected to be a constant 6 percent per year, indefinitely. Investors require a return of 15 percent on the stock for the first three years, a rate of return

If Naomi invests in a stock portfolio, her returns for 10 or more years will average 10%-12%. Naomi realizes that the stock market has higher returns because it is a more risky investment than a savings account or a CD. She wants her calculations to be

49. ## Managerial Finance

Assume that investors have recently become more risk averse, so the market risk premium has increased. Also, assume that the risk-free rate and expected inflation have not changed. Which of the following is most likely to occur? A. The required rate of

50. ## Finance

A stock has an expected return of 10 percent, the risk-free rate is 6 percent, and the market risk premium is 5 percent. The beta of this stock must be . Note that the market risk premium is given.

51. ## finance

5.Capital Co. has a capital structure, based on current market values, that consists of 21 percent debt, 9 percent preferred stock, and 70 percent common stock. If the returns required by investors are 10 percent, 12 percent, and 17 percent for the debt,

52. ## algebra

You have 10,000.00 to invest in two types of stock. the expected annual returns for the stocks are: stock A - 10 percent, stock b - 6 percent. You want the overall annual return to be 8 percent. Write a linear system of equations that represents the given

53. ## finance (Check Answer plz)

Following are rates of return on medical equip. company's stock and debt, and on the market portfolio, along with the probability of each state. State Prob. Ret.on Stock Ret.on Debt Ret.on Market 1 .1 3 8 5 2 .3 8 8 10 3 .4 20 10 15 4 .2 15 10 20 What is

54. ## finance (Check Answer plz)

Following are rates of return on medical equip. company's stock and debt, and on the market portfolio, along with the probability of each state. State Prob. Ret.on Stock Ret.on Debt Ret.on Market 1 .1 3 8 5 2 .3 8 8 10 3 .4 20 10 15 4 .2 15 10 20 What is

55. ## finance (Check Answer plz)

Following are rates of return on medical equip. company's stock and debt, and on the market portfolio, along with the probability of each state. State Prob. Ret.on Stock Ret.on Debt Ret.on Market 1 .1 3 8 5 2 .3 8 8 10 3 .4 20 10 15 4 .2 15 10 20 What is

56. ## Finance (Check Answer plz)

Following are rates of return on medical equip. company's stock and debt, and on the market portfolio, along with the probability of each state. State Prob. Ret.on Stock Ret.on Debt Ret.on Market 1 .1 3 8 5 2 .3 8 8 10 3 .4 20 10 15 4 .2 15 10 20 What is

57. ## finance

You want to have \$2 million in real dollars in an account when you retire in 30 years. The nominal return on your investment is 8 percent and the inflation rate is 5.3 percent. What real amount must you deposit each year to achieve your goal? (Do not round

58. ## Real reverse Nominal Returns

You purchase 100 shares of stock for \$40 a share. The stock pays a \$2 per share dividend at year-end. What is the rate of return on your investment for these end-of-year stock prices? What is your real (inflation-adjusted) rated of return? Assume an

59. ## Investments Analysis

Can anyone help with ANY of these? Any good starting points would be great! Alpha (STI) 0.90 2008 Return(STI) 15% Beta(STI) 1.20 2008 Return(INX) 10% R_squared 36% Risk Free Rate 4% Variance(STI) .1296 b. What is the relative volatility (variability) of

60. ## Finance

Anderson Inc.’s current dividend is \$2.40 per share. The dividend is expected to grow at a rate of 6 percent per year. The risk free rate is 5 percent and the return on the market is 9 percent. If the company’s beta is 1.3, what is the price of the

61. ## Finance

The Frenall Company just paid a common stock dividend of \$4.00 per share. The required rate of return on Frenall stock is 18.4 percent. Due to a major restructuring of the company’s production process, Frenall’s dividends are expected to decline by 25

62. ## Quantitative methods

Allen must decide whether to invest \$10,000 in the stock market or in a certificate of deposit (CD) at an interest rate of 9%. If the market is good , he believes that he could get a 14% return on his money. With a fair market, he expects to get an 8%

63. ## General Math

I am so confused can anyone help me understand which one is correct and why.... Beta is estimated as the slope of a regression line fit to pairs of periodic returns, (rx, ry), where: rx is the return for a market index such as the S&P 500 Index. rx is the

64. ## econ-HELP!

CAN ANYONE PLEASE HELP// 1. In the Country of Wiknam, the velocity of money is constant. Real GDP grows by 5 percent per year, the money stock grows by 14 percent per year, and the nominal interest rate is 11 percent. What is the real interest rate? 2. The

65. ## ECON-can anyone help

CAN ANYONE PLEASE HELP// 1. In the Country of Wiknam, the velocity of money is constant. Real GDP grows by 5 percent per year, the money stock grows by 14 percent per year, and the nominal interest rate is 11 percent. What is the real interest rate? 2. The

66. ## finance

1. Assume investors expect a 2.0 percent real rate of return over the next year. If inflation is expected to be 0.5 percent, what is the expected nominal interest rate for a one-year U.S. Treasury security?

67. ## finance

Assume investors expect a 2.0 percent real rate of return over the next year. If inflation is expected to be 0.5 percent, what is the expected nominal interest rate for a one-year U.S. Treasury security?

68. ## Finance

Currently the risk-free rate equals 5% and the expected return on the market portfolio equals 11%. An investment analyst provides you with the following information: Stock beta Expected return A 1.33 12% B 0.7 10% C 1.5 14% D 0.66 9% Required: 1. Indicate

69. ## Brian

A stock has an expected return of 15 percent, its beta is 0.4, and the risk-free rate is 6.75 percent. The expected return on the market must be ?percent. This sample give the ERM as 0.2738 but dosent give the formula. What would the formula be?

70. ## ECON--HELP!!!

I am at work and am sending this on my cell phone.. BEFORE MY EXAM TONIGHT, CAN ANYONE PLEASE HELP// 1. In the Country of Wiknam, the velocity of money is constant. Real GDP grows by 5 percent per year, the money stock grows by 14 percent per year, and the

71. ## Financing

Define the following terms and identify their role in financing A. Finance B. Efficient Market C. Primary Market D. Secondary Market E. Risk F. Security G. Stock H. Bond I. Capital J. Debt K. Yield L. Rate of Return M. Return of Investment N. Cash Flow

72. ## Finance

A four-year TIPS bond promises a real annual coupon return of 4 percent and its face value is \$1,000. While the annual inflation rate was approximately zero when the bond was first issued, the inflation rate suddenly accelerated to 3 percent and is

73. ## THEORY OF INTEREST

Suppose that a money market fund pays a nominal rate of interest of 8.7 percent convertible monthly. What is the equivalent nominal rate convertible quarterly?

74. ## Math

Stock Market History a. What was the average rate of return on large U.S. common stocks from 1900 to 2001? b. What was the average risk premium on large stocks? C. What was the standard deviation of returns on the market portfolio? a. Which index?

75. ## Finance

Hooks Athletics, Inc., has outstanding a preferred stock with a par value of \$30 that pays a dividend of \$2.50. The preferred stock is redeemable at the option of the stockholder in 10 years at a price equal to \$30. The stock may be called for redemption

76. ## finance

Use the capital-asset pricing model to predict the returns next year of the following stocks, if you expect the return to holding stocks to be 12 percent on average, and the interest rate on three-month T-bills will be two percent. Calculate a stock with a

77. ## Financial analysis-Need by tomorrow please!!!!!!!!

If the risk-free rate is 6 percent and the expected rate of return on the market portfolio is 14 percent, is a security with a beta of 1.25 and an expected rate of return of 16 percent overpriced or underpriced?

78. ## mba

Analyze the following portfolios performance using Jensen index, Treynor index and Sharpe index versus the market: Observed Rate of Return Beta (β) Residual Variance Magic fund 15% 1.5 0.02 Shanti fund 10% 0.5 0.00 Risk-free rate of interest is 50%,

79. ## MBA

Analyze the following portfolios performance using Jensen index, Treynor index and Sharpe index versus the market: Observed Rate of Return Beta (β) Residual Variance Magic fund 15% 1.5 0.02 Shanti fund 10% 0.5 0.00 Risk-free rate of interest is 50%,

80. ## finance

alpha of stock zero return on market 16% risk free rate 5% stock earns a return that exceeds risk free rate by 11% What is the Beta of the stock?

81. ## investing 3-19

A perpetual preferred stock pays a fixed dividend of \$9 and sells for \$100. What is the stock’s rate of return? A. 6.5 percent B. 9 percent C. 11 percent D. 12.5 percent I think it's B. 9 percent. \$9.00 / 100 = .09

Based on this financial info where a company's Beta Year = 2008, the Company's commons stock = 0.85, the Risk-Free Rate of Return = 5%, and the Market Risk Premium = 6%. Use the dividend growth model to calculate the Company's Common Stock in 2008. Stock 1

83. ## STOCKS & BONDS

Alpha Corporation has outstanding an issue of preferred stock with a par value of \$100. It pays an annual dividend equal to 8 percent of par value. If the required return on Alpha’s preferred stock is 6 percent, and if Alpha pays its next dividend in one

84. ## statistics

Suppose that the percentage returns for a given year for all stocks listed on the new york stock exchange are approximately normally distributed with a mean of 12.4 percent and a standard deviation of 20.6 percent. Consider drawing a random sample of n=5

85. ## Finance

Teddy Company paid a \$3.50 dividend this year (D0 = \$3.50). Next year the company expects to pay a \$4.00 dividend (D1 = \$4.00). The stock's dividend is expected to grow at a rate of 15 percent a year until three years from now (t = 3). After this time, the

86. ## Statistics

Hi, Are market returns (with numbers such as -3.45, 4, 2.456 representing the "returns") ordinal or nominal data? Thanks!

87. ## math

You have finally saved 10,000 and are ready to make your first investment. You have the three following alternatives for investing that money: 1) Captial cities ABC Inc. bonds with a par value of \$1000 that pays an 8.75 percent on its par value in

88. ## finance

You have finally saved 10,000 and are ready to make your first investment. You have the three following alternatives for investing that money: 1) Captial cities ABC Inc. bonds with a par value of \$1000 that pays an 8.75 percent on its par value in

89. ## Finance

If an instrument has a 10.7% Nominal Return, the inflation rate is 3.1%, and your tax rate is 28%, what’s your approximate “Real After-Tax Return?” a. 4.6% b. 7.6% c. 5.8% d. none of the above

90. ## Finance

Consider the following information and calculate the required rate of return for the Winkler Investment Fund. The total investment fund is \$2 million. Stock Investment Beta ----- ---------- ---- A \$ 200,000 1.50 B 300,000 -0.50 C 500,000 1.25 D 1,000,000

91. ## maths

SHARES AND DIVIDENDS 1-introduction- 2-explain the terms -; Nominal value/face value, market value, rate of dividend, annual dividend, rate of income, rate of return, percentage yield, Demat, bullish, bearish. 3- Fill up an application form for shares with

92. ## Finance

Faulkner Corporation expects to pay an end-of-year dividend, D1, of \$1.50 per share. For the next two years the dividend is expected to grow by 25 percent per year, after which time the dividend is expected to grow at a constant rate of 7 percent per year.

93. ## math

It is equally probable that stock A will have a +10% or -10% rate of return The only other possibility is that it will return 0%.The probability of 0% is twice that for a return of +10%. What is the expected return and Standard deviation of the return for

94. ## Finance

Th e Seneca Maintenance Company currently (that is, as of year 0) pays a common stock dividend of \$1.50 per share. Dividends are expected to grow at a rate of 11 percent per year for the next four years and then to continue growing thereaft er at a rate of

95. ## Finance

The Seneca Maintenance Company currently (that is, as of year 0) pays a common stock dividend of \$1.50 per share. Dividends are expected to grow at a rate of 11 percent per year for the next 4 years and then to continue growing thereafter at a rate of 5

96. ## finance

The Nutrex Corporation wants to calculate its weighted average cost of capital. Its target capital structure weights are 40 percent long-term debt and 60 percent common equity. The before-tax cost of debt is estimated to be 10 percent and the company is in

97. ## Finance; Stock Valuation

Early in 2007, Inez Marcus, the chief financial officer for Suarez Manufacturing, ws given the task of assessing the impact of a proposed risky investment on the firm's stock value. To perform the necessary analysis, Inez gathered the following information

98. ## Algebra

Some investments in the stock market have earned 12% annually. At this rate, earnings can be found using the formula A = P(1.12)^n, where A is the total value of the investment, P is the initial value of the investment, and n is the number of years the

99. ## finace

15. Suppose that the following version of the APT is a good model of rick in the stock market. Consider three factors: the stock market’s excess return in percentage points, the change over the last year in the price of oil in dollars, and the spread

100. ## statistics

Suppose that the percentage returns for a given year for all stocks listed on the New York Stock Exchange are approximately normally distributed with a mean of 12.4 percent and a standard deviation of 20.6 percent. Consider drawing a random sample of n= 5