1) Suppose the real rate is 3.45 percent and the inflation rate is 2.2 percent. What rate would you expect to earn on a Treasury bill? 

A) 1.25 percent 

B) 7.75 percent 

C) 5.73 percent 

D) 6.56 percent 

E) 3.30 percent 

2) The common stock of Dayton Repair sells for $47.92 a share. The stock is expected to pay $2.28 per share next year when the annual dividend is distributed. The company increases its dividends by 1.65 percent annually. What is the market rate of return on this stock?  

A) 6.14 percent 

B) 6.41 percent 

C) 9.92 percent 

D) 4.84 percent 

E) 7.28 percent

Answer rating: 100% (QA)

1 Nominal Rate 1 Real Rate 1 Inflation 1 1 00345 1 0022 1 10573 1 00573 or 573 Hence Option C is cor... View the full answer