Problem $1-04$

Compute the real rates of return for the following situations assuming that the inflation rate is $4$ percent. Compute the real rates of return if the rate of inflation was $7$ percent. Use a minus sign to enter negative values, if any. Do not round intermediate calculations. Round your answers to one decimal places.

On February $1,$ you bought $130$ shares of stock in the Francesca Corporation for $$28$ a share and a year later you sold it for $$33$ a share. During the year, you received a cash dividend of $$1\mathrm{.}80$ a share.

Real rate of return at $4\%$:

$\%$

Real rate of return at $7\%$:

$\%$

On August $15,$ you purchased $120$ shares of stock in the Cara Cotton Company at $$30$ a share and a year later you sold it for $$24$ a share. During the year, you received dividends of $$3\mathrm{.}80$ a share.

Real rate of return at $4\%$:

$\%$

Real rate of return at $7\%$:

$\%$

At the beginning of last year, you invested $$3,000$ in $60$ shares of the Chang Corporation. During the year, Chang paid dividends of $$5\mathrm{.}00$ per share. At the end of the year, you sold the $60$ shares for $$62$ a share.

Real rate of return at $4\%$:

$\%$

Real rate of return at $7\%$:

$\%$