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Suppose the Sam Sell Select Fund buys a property at the end of 2 0 0 5 for $ 1 1 , 2 5 0

Suppose the Sam Sell Select Fund buys a property at the end of 2005 for $11,250,000
on behalf of its wealthy investor clients. At the end of 2006, the fund sells the property
for $12,500,000 after obtaining net cash flow of $950,000 at the end of 2006. Suppose
inflation during 2006 was 3.5% and government bonds yielded 5%. Consider the simple
holding period returns for the 2006 calendar year period. Compute the following return
measures (to the nearest basis point).
a. The nominal income return
b. The nominal appreciation return
c. The nominal total return
d. The ex post risk premium
e. The real appreciation return (using the exact definition)
f. The continuously compounded nominal total return
g. The continuously compounded nominal appreciation return
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