Macmillan Learning Suppose you are considering putting your savings in an investment fund. Scenario A projects...
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Macmillan Learning Suppose you are considering putting your savings in an investment fund. Scenario A projects stable prices, and therefore, low returns. Scenario B involves high inflation and, consequently, high returns. In both cases, the capital earnings tax rate is 29.0%. Scenario Inflation 2.5% Nominal rate of return 5.50% B 15% A 18.00% Calculate the nominal and real after-tax returns for both scenarios. Please include at least two numbers after the decimal point for your answers. Do not round your answers. In Scenario A, what is the nominal after-tax rate of return? In Scenario A, what is the real after-tax rate of return? In Scenario B, what is the nominal after-tax rate of return? In Scenario B, what is the real after-tax rate of return? % 29 80 % % % Macmillan Learning Suppose you are considering putting your savings in an investment fund. Scenario A projects stable prices, and therefore, low returns. Scenario B involves high inflation and, consequently, high returns. In both cases, the capital earnings tax rate is 29.0%. Scenario Inflation 2.5% Nominal rate of return 5.50% B 15% A 18.00% Calculate the nominal and real after-tax returns for both scenarios. Please include at least two numbers after the decimal point for your answers. Do not round your answers. In Scenario A, what is the nominal after-tax rate of return? In Scenario A, what is the real after-tax rate of return? In Scenario B, what is the nominal after-tax rate of return? In Scenario B, what is the real after-tax rate of return? % 29 80 % % %
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