A person invested 5000 euros into stocks on Jan.1, 2018 and sold these stocks for 6000 euros on Jan.1, 2020. There were no commission fees applied on these trades. Suppose that the realized capital gains and dividends were not subject to taxation. The annual inflation rate in the country of residence of this person, was 6% in 2018 and 10% during 2019.

a) Find the holding period (2-year) real rate of return for this person from the investment described.

b) Find the annualized (annual) holding period real rate of return for this person from the investment described. Present complete solution in a logical order (step-by-step). Explain (define) clearly, what are you calculating. Answer all the questions explicitly.