ch 4 mid term practice

The expected return on a share of ExxonMobil stock in the U.S. Is 15.6 % while the expected return on a share of Royal Dutch Shell stock is 12.6% in the Netherlands. The pure rate of return is 2% in both countries and the risk premium is 6% for each company's stock. Required: A. What is the long-term expected inflation rate in the U.S. If the multiplicative form of the Fisher model is used in making the calculation? (Please carry your final answers out to 2 decimal places.) B. What is the long-term expected inflation rate in the Netherlands, If the multiplicative form of the Fisher model is used in making the calculation? (Please carry your final answers out to 2 decimal places.) A B Your answers to this problem should be placed in the space below this line