The risk-free return is 5.79 percent, the expected return on the market is 13.8 percent, the expected real return for Litchfield Design stock is 3.64 percent, and the beta for Litchfield Design stock is 0.6. What is the inflation rate expected to be? Answer as a rate in decimal format so that 12.34% would be entered as .1234 and 0.98% would be entered as .0098.

Answer rating: 100% (QA)

To calculate the expected inflation rate we can use the Fisher equation which states Expected Nomina... View the full answer