The adjusted closing prices of Wendy's/Arby's Group, Inc., for the first three months of 2008 are presented
Question:
The adjusted closing prices of Wendy's/Arby's Group, Inc., for the first three months of 2008 are presented in the following table. Also included in the table is the corresponding consumer price index (CPI).
Date.................. Adjusted Closing Price.................. CPI (Base 1982-1984)
January, 2008.............................. 8.94................................... 212.225
February, 2008............................. 8.29.................................. 212.703
March, 2008................................ 6.01................................... 213.543
a. Find the real rate of return for the three months by first using the CPI to deflate the adjusted closing price.
b. Replicate the above result with Fisher's equation, based on the nominal rate of return and the inflation rate?
Step by Step Answer:
a We find real adjusted price as The percentage change in the real adjusted price is comp...View the full answer
Business Statistics Communicating With Numbers
ISBN: 9780078020551
2nd Edition
Authors: Sanjiv Jaggia, Alison Kelly
