Question
Using historical risk premiums from Table 5.5 over the 19272018 period as your guide, what would be your estimate of the expected annual HPR on
Using historical risk premiums from Table 5.5 over the 19272018 period as your guide, what would be your estimate of the expected annual HPR on the Big/Value portfolio if the current risk-free interest rate is 2.10%? (Round your answer to 2 decimal places.)
expexted annual HPR =
2. During a period of severe inflation, a bond offered a nominal HPR of 79% per year. The inflation rate was 68% per year. a. What was the real HPR on the bond over the year? (Round your answer to 2 decimal places.)
Real HPA %
b. Find the approximation rreal rnom i. Compare your answer in part b to the one in part a.
Approximation %
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