Question
The following return series comes from Global Financial Data. Year Large Stocks LT Gov Bonds US T-bills (Rf asset) CPI (inflation) 1984 31.73% 16.53% 9.90%
The following return series comes from Global Financial Data.
| Year | Large Stocks | LT Gov Bonds | US T-bills (Rf asset) | CPI (inflation) |
| 1984 | 31.73% | 16.53% | 9.90% | 3.80% |
| 1985 | 18.67% | 39.03% | 7.71% | 1.10% |
| 1986 | 5.25% | 32.51% | 6.09% | 4.43% |
| 1987 | 16.61% | -8.09% | 5.88% | 4.20% |
| 1988 | 31.69% | 8.71% | 6.94% | 4.65% |
Using the approximate fisher equation, calculate the average real return earned on large-company stocks. (Enter percentages as decimals and round to 4 decimal
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Corporate Financial Management
Authors: Douglas R. Emery, John D. Finnerty, John D. Stowe
4th Edition
1935938002, 9781935938002
