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What is the difference between real and nominal rates of interest? Explain the four moments with respect to investing and specifically, to risk-return. How does
- What is the difference between real and nominal rates of interest? Explain the four moments with respect to investing and specifically, to risk-return. How does this link to normality assumptions? What information does each contain? Which of the four risky portfolios outlined at the chapter's close should longer term investors bias their portfolios? Why? What is a risk premium (on equities)? What is risk aversion? What is the difference between arithmetic and geometric average returns?
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1 Difference between real and nominal rates of interest The real interest rate is the rate of return adjusted for inflation while the nominal interest rate is the stated rate without adjusting for inf...
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Macroeconomics
Authors: Glenn Hubbard, Anthony Patrick O'Brien, Matthew P Rafferty
1st Edition
978-0132109994, 0132109999
