The adjusted close prices of Wendy's/Arby's Group, Inc., for the first three months of 2008 are presented in the follow ing table. Also included in the table is the corresponding consumer price index (CPI).

Date Adjusted Close Price CPI (Base 1982-1984)

January, 2008 8.94 212.225 February, 2008 8.29 212.703 March, 2008 6.01 213.543 Source: http://finance.yahoo.com; and Bureau of Labor Statistics.

a. Find the real rate o f return for the three months by first using the CPI to deflate the adjusted close price.

b. Replicate the above result w ith Fisher's equation, based on the nominal rate o f return and the inflation rate.