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Suppose 50 troy ounce of gold sold for $12,000 in 1957, but in 2007, $12,000 could only buy 6.58 troy ounce of gold. (a) What
Suppose 50 troy ounce of gold sold for $12,000 in 1957, but in 2007, $12,000 could only buy 6.58 troy ounce of gold. (a) What was the compounded average annual inflation rate during this period of time? (b) $50 invested in the stock market in 1957 was worth $1,952 in 2007. In view of your answer to part (a), what was the annual real interest rate earned on this investment?
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