Answered step by step
Verified Expert Solution
Question
1 Approved Answer
P5-1: The level of the Syldavian market index is 22,800 at the start of the year and 27,300 at the end. The dividend yield on
P5-1: The level of the Syldavian market index is 22,800 at the start of the year and 27,300 at the end. The dividend yield on the index is 5.0%.
(Only pending part c)
a. What is the return on the index over the year? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Return 24.74 % b. If the interest rate is 6%, what is the risk premium over the year? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Risk Premium 18.74 % c. If the inflation rate is 8%, what is the real return on the index over the year? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Real Return %Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started