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Problem 11-8 Real versus Nominal Returns (LO2) You purchase 100 shares of stock for $50 a share. The stock pays a $2 per share dividend
Problem 11-8 Real versus Nominal Returns (LO2) You purchase 100 shares of stock for $50 a share. The stock pays a $2 per share dividend at year-end. a. What is the rate of return on your investment if the end-of-year stock price is (i) $48; (ii) $50; (iii) $55 ? b. What is your real (inflation-adjusted) rate of return if the inflation rate is 3% ? Complete this question by entering your answers in the tabs below. What is your real (inflation-adjusted) rate of return if the inflation rate is 3% ? Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Negative amounts should be indicated by a minus sign
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