Ask Question
1 July, 12:25

An investment offers a total return of 13.8 percent over the coming year. You believe the total real return will be only 9.4 percent. What do you believe the exact inflation rate will be for the next year?

+1
Answers (1)
  1. 1 July, 12:47
    0
    you would believe that the exact inflation rate will be 4.02% for the next year.

    Explanation:

    exact inflation rate = (1 + nominal return) / (1 + real return) - 1

    = 1.138/1.094 - 1

    = 4.02%

    Therefore, you would believe that the exact inflation rate will be 4.02% for the next year.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “An investment offers a total return of 13.8 percent over the coming year. You believe the total real return will be only 9.4 percent. What ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers