Problem $11-8$ Real versus Nominal Returns $($LO$2)$

You purchase $100$ shares of stock for $$40$ a share. The stock pays a $$2$ per share dividend at year$-$end.

a$.$ What is the rate of return on your Investment if the end$-$of$-$year stock price is $($I$)$ $$38$; $($II$)$ $$40$; $($III$)$ $$44?$

b$.$ What is your real $($Inflation$-$adjusted$)$ rate of return if the Inflation rate is $3\%?$

Complete this question by entering your answers in the tabs below.

Required A

Required B

What is your real $($inflation$-$adjusted$)$ rate of return if the inflation rate is $3\%?$

Note: Do not round intermediate calculations. Enter your answers as a percent rounded to $2$ decimal places. Negative amounts should be indicated by a minus sign.

$\backslash$table$[[$Stock Price,Real Rate of Return$],[38,(3\mathrm{.}00),\%,],[40,2\mathrm{.}00,\%,],[44,12\mathrm{.}00,\%,]$