Question
During the past year, you had a portfolio that contained U.S. government T-bills, long-term government bonds, and common stocks. The rates of return on each
During the past year, you had a portfolio that contained U.S. government T-bills, long-term government bonds, and common stocks. The rates of return on each of them were as follows: U.S. government T-bills 4.10 % U.S. government long-term bonds 5.20 U.S. common stocks 7.60 During the year, the consumer price index, which measures the rate of inflation, went from 100 to 110 (1982 1984 = 100). Compute the rate of inflation during this year. Round your answer to one decimal place. % Compute the real rates of return on each of the investments in your portfolio based on the inflation rate. Use a minus sign to enter negative values, if any. Do not round intermediate calculations. Round your answers to two decimal places. Real rate of return U.S. government T-bills % U.S. government long-term bonds % U.S. common stocks %
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