In Table, why are the average real returns lower than the average nominal returns for each asset
Question:
Transcribed Image Text:
Nominal (%) Real (%) Asset Class Average Best Year WorstYe Average Best Year Worst Year Bills Bonds Stocks 4.0 5.2 11.7 14.7 40.4 57.6 0.0 9.2 43.9 2.3 8.5 19.7 35.1 56.5 -15.1 19.4 38.0
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 47% (17 reviews)
Table shows that sometimes though not often an assets nominal return may be higher than its real ret...View the full answer
Answered By
Sagar Kumar
I am Mechanical Engineer with CGPA of 3.98 out of 4.00 from Pakistan. I went to Government Boys Degree College, Sehwan for high school studies.
I appeared in NUST Entrance Exam for admission in university and ranked #516. My mathematics are excellent and I have participated in many math competitions and also won many of them. Recently, I participated in International Youth Math Challenge and was awarded with Gold Honor. Now, I am also an ambassador at International Youth Math Challenge,
I have been teaching when I was in 9th class class year 2012. I have taught students from 6th class to university level.
5.00+
1+ Reviews
10+ Question Solved
Related Book For
Introduction to Corporate Finance
ISBN: 978-0324657937
2nd edition
Authors: Scott B. Smart, William L Megginson
Question Posted:
Students also viewed these Corporate Finance questions
-
Is it always true that someone sells a stock because they think it is going to go down in price? How do those words apply to what you've learned in this lesson?
-
Is it always true that (x y) z = x (y z)?
-
Is it always true that the probability of finding the electron in the H atom is greater in the interval r dr < r < r + dr than in the interval r dr < r < r + dr d < < + d - d < < + d?
-
Should U.S. national forests become privatized (sold to private owners)? Why or why not?
-
Discuss the differences between DDL and DML? What operations would you typically expect to be available in each language?
-
1 a) Using the information in the case and Tables 1-3, prepare a flexible budget for the Berkshire Toy Company for the year ended June 30, 2021. Analyze the company's total master (static) budget...
-
The following are the items in the UKs 2021 balance of payments: billions Exports of goods 323.56 Imports of goods 492.77 Exports of services 330.73 Imports of services 189.55 Net income flows 11.87...
-
The post-closing trial balance of Hokie Manufacturing Co. on April 30 is reproduced as follows: During May, the following transactions took place: a. Purchased raw materials at a cost of $45,000 and...
-
How are risk quantification problems resolved if there are differences of opinion between the client and the contractors?
-
Chad Boudreaux is a 58-year riverboat captain. He grew up in New Orleans and has worked on the Mississippi River his entire life. He works for a private company in New Orleans called Crescent River...
-
Why do investors need to pay attention to real returns, as well as nominal returns?
-
Suppose nominal bond returns approximately follow a normal distribution. Using the data in Table, construct a range that should contain 95 percent of historical bond returns. Next, refer to Figure....
-
In Problem 9.40, what is the statistical decision if you test the null hypothesis at the 0.01 level of significance? In Problem 9.40 In a one-tail hypothesis test where you reject H 0 only in the...
-
Amazing Electronics Corporation Symbol: AEC LAST TRADE 105.28 OPEN 105.00 SHARES OUTSTANDING 1,737,418,000 PRICE/EARNINGS RATIO: INDICATED ANNUAL DIVIDEND: YIELD (%): HIGH 105.80 PREVIOUS DAY'S CLOSE...
-
Imagine that you work for a nonprofit organization that is focused on increasing diversity in community groups in your area. Your supervisor asks you to develop a sociological study concerning topics...
-
Dim Sum Restaurant Group Limited has the following shareholders' equity account as of 31 December 2018: Share capital Capital surplus Retained profit Total shareholders' equity $250,000 $950,000...
-
The following statements have errors. What are they? class Employee { }; } private: string name; string ID; string department; public: Employee (string n, string id) { } name = n; ID = id;...
-
As Two Economists Debate Markets, The Tide Shifts; Belief in Efficient Valuation Yields Ground to Role Of Irrational Investors; Mr. Thaler Takes On Mr. Fama Jon E. Hilsenrath. Wall Street Journal....
-
What is the purpose of management accounting?
-
Choose two matrices A and B with dimension 2 x 2. Calculate det A, det B, and det (AB). Repeat this process until you are able to discover how these three determinants are related. Summarize your...
-
You are interested in using short selling to increase the possible returns from your portfolio.19 you have short sold $200 of ABC and invested $1,200 in DEF. The following data are available on ABC...
-
Using the following information, calculate the expected return and the standard deviation ofABC. | Probability | ABC stock return (%) State of the economy Depression Recession Normal Boom -5 0.15 0.2...
-
Five years ago, your dad bought 250 shares of ABC for $6 each and 300 shares of DEF for $7.50 each. He has now given you all his shares, when both stocks are trading at $8. What are the weights of...
-
What is the impact if the auditor discovers that the client forgot to accrue the utility expense?
-
How will you use the knowledge of the SPL model to address contemporary leadership problems in your organization?
-
With reference to the Employee Retirement Income Security Act (ERISA), write the statements about fiduciaries.
Study smarter with the SolutionInn App