What is the real rate of return if the stated rate is 8.85% and prices are expected to rise by 3.70%? 5 6 7 8 9 10 11 12 13 14 15 What rate of return is necessary in order to be able to purchase 5.60% more if Inflation is going to be 2.25%? 16 Suppose you held a stock for four months, during which time the stock 17 had the following monthly returns: 10.75%, 0.00%, -5.00%, and 7.00%. 18 What is your gross holding period rate of return? 19 20 21 Suppose you held a stock for four months, during which time the stock 22 had the following monthly returns: 10.75%, 0.00%, -5.00%, and 7.00% 23 What is your net holding period rate of return? 24 25 26 Suppose you held a stock for four months, during which time the stock 27 had the following monthly returns: 10.75%, 0.00% 5.00%, and 7.00%. 28 What is your geometric average monthly rate of return? 29 7.22% Answer 19 20 21 Suppose you held a stock for four months, during which time the stock 22 had the following monthly returns: 10.75%, 0.00%, -5.00%, and 7.00% 29 What is your net holding period rate of return? 24 25 26 Suppose you held a stock for four months, during which time the stock 27 had the following monthly returns: 10.75%, 0.00%, -5.00%, and 7.00%. 28 What is your geometric average monthly rate of return? 29 30 31 What is the net present value of a project that will cost $103,000 if it 32 will increase cash by $53,500 next year and increase cash by $79,500 in 33 the second year? The appropriate discount rate is 11.75%? 34 35 36 What rate of return will a project generate if will cost $103,000 and 37 Increase cash by $53,500 next year and increase cash by $79,500 in the 38 second year? 39