Calculate the dollar rate of return and real rate of return

Assignment Help Business Economics

Reference no: EM131426024

Calculate the dollar rate of return and the real rate of return on following assets :

a) A painting whose price rises from to in a year if the painting’s price rises from $150,000 to $200,000 in a year and prices of other goods and services rise by 10%.

b) On a 5,000 pound sterling deposit in a London bank in a year when the interest rate on pounds is 6% and the dollar/pound exchange rate moves from $1.51 per pound to $1.44 per pound and prices of all goods and services rises by 1%.

Reference no: EM131426024

Questions Cloud

Effect of temporary decrease in the european money supply : What is the short-run effect of a temporary decrease in the European money supply on the US money market and the foreign exchange market, holding everything else constant? Illustrate graphically using E$/€ as the exchange rate and explain what happen..

Why are values important in development economics : Why are values important in development economics? If we say that the economy of the Central African Republic is subsistence economy, what would that mean? According to The New Economic View of Development, why economic development is different from ..

Describe the traditional society stage : Which are the three measures included in the new development index and why the index is a preferred method of measuring development relative to the income per capita? List the stages of development in the linear stage model. Describe the “Traditional..

The world market economy within this time frame : Research the world market economy during the seventeenth and eighteenth centuries. Use the following to guide your research: Choose one significant event that occurred in the world market economy within this time frame. Describe your chosen event, it..

Calculate the dollar rate of return and real rate of return : Calculate the dollar rate of return and the real rate of return on following assets. A painting whose price rises from to in a year if the painting’s price rises from $150,000 to $200,000 in a year and prices of other goods and services rise by 10%.

The rate on dollars will decline in the near future : Traders in asset markets suddenly learn that the rate on dollars Will decline in the near future. Explain ( by using graph) how this will effect and change the current dollar /euro exchange rate, assuming current interest rates on dollar and euro dep..

Calculate cross-price elasticity of demand for gas-interpret : Suppose that market price of diesel fuel falls from $5 to $3 per gallon and afterwards weekly quantity demanded for gas decreases from 18 to 16 gallons per week. Calculate cross-price elasticity of demand for gas and interpret the result.

Find all pure-strategy nash equilibria and pareto optimal : An old man is looking for help to cross the street. Only one person is needed to help him; two persons can help him, but the help is not of any higher quality. Write the payoff matrix associated with this strategic interaction situation. Find the Par..

Calculations for each scenario and label all cash flows : Construct a cash flow diagram illustrating the cash flows involved in the following transaction from the bank’s viewpoint. The amount loaned is $6000 at 4% compound interest for ten years. Be sure to label all amounts including the final repayment. T..

User Account

All Pages