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- which one is correct please confirm? QUESTION 21 If the return on U.S. Treasury bills is 7.02%, the risk premium is 2.32%, and the inflation rate is 4.16%, then the real rate of return is ____. a. 7.02% b. 6.48% c. 4.70% d. 2.86%Suppose we have the following Treasury bill returns and inflation rates over an eight- year period: Year Treasury Bills Inflation 9.57% 12345678 7.96% 8.76 6.59 5.74 6.17 8.41 11.38 13.02 13.22 7.71 5.48 7.47 9.84 14.14 13.56 c. What is the average real return for Treasury bills over this period? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Average real returnConsider the following information: State of Economy Recession Boom Probability of State Rate of Return if of Economy State Occurs Expected return .20 .80 Calculate the expected return. Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. -.13 .19 %
- Inflation is expected to average 2.4% per year for the next 44 years. What percentage of the purchasing power of the dollar will be lost?es www Year 1 2 3 4 5 Returns X59200 15 % -22 10 10 Y 22% 30 -27 "* 10 21 Using the returns shown above, calculate the arithmetic average returns, the variances, and the standard deviations for X and Y. (Do not round intermediate calculations. Enter your average return and standard deviation answers as a percent rounded to 2 decimal places, e.g., 32.16. Enter your variance answers rounded to 5 decimal places, e.g., .16161.) Average returns Variances Standard deviations X 15 % % % Y % &Problem 2: A $50 bill in 1957 worth only $6.58 in 2007. What was the compounded average annual inflation rate (loss of purchasing power) during this period of time? You may need the following formula to solve the problem: (F/P, i%, N) = (1 + i)N A/
- Mf4. . Assume that you bought a Treasury bill at price=92.450 and sold two days later at 92.550. What is your holding period return? What is your annualized return?1. The price of an item in 2004 was $1.3. Use an inflation rate of 4% to calculate its price in 2030.Consider the following information: State of Economy Recession Boom Probability of State of Economy .20 .80 Expected return Rate of Return if State Occura Calculate the expected return. Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. % -.13 .19
- Consider the following information: State of Economy Recession Normal Boom Probability of State Rate of Return if State Occurs of Economy Expected return .10 .60 .30 Calculate the expected return. Note: Do not round intermediate calculations and enter your answer as a percentrounded to 2 decimalplaces,e.g., 32.16. -.17 .08 .27 %Q2 Following are four economic states, their likelihoods, and the potential returns: Economic State Probability Return Fast growth 0.30 60 % Slow growth 0.50 13 Recession 0.15 –15 Depression 0.05 -45 Compute the expected return and standard deviation. (Round your answers to 2 decimal places.) EXPECTED RETURN % STANDARD DEVIATION. %If the inflation rate is 6%, cost of money is 10%, what interest rate will take care of inflation and the cost of money? а. 16.6% с. 17.7% b. 15.5% d. 14.4%