Question
The following table shows nominal US stock returns and the inflation rate. Year Nominal profitability (%) Inflation (%) 2010 12.0 4.0 2011 6.8 3.4 2012
The following table shows nominal US stock returns and the inflation rate.
| Year | Nominal profitability (%) | Inflation (%) |
| 2010 | 12.0 | 4.0 |
| 2011 | 6.8 | 3.4 |
| 2012 | 15.7 | 2.9 |
| 2013 | 7.1 | 4.4 |
| 2014 | -44.0 | .3 |
a. What was the standard deviation of nominal market returns? (Do not adjust for degrees of freedom described in footnote 18.) (Use decimals, not percentages, in your calculations. Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places.) ANSWER: 4.87 %
b. Calculate the arithmetic average real return. (A negative answer should be indicated with a minus sign. Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places.)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
To calculate the arithmetic average real return we need t...
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Income Tax Fundamentals 2013
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
31st Edition
1111972516, 978-1285586618, 1285586611, 978-1285613109, 978-1111972516
