### Question on real rate of return

Assignment Help Finance Basics
##### Reference no: EM1334374

Carl Foster, a trainee at an investment banking firm, is trying to get an idea of what real rate of return investors are expecting in today's marketplace. He has looked up the rate paid on 3-month U.S. Treasury bills and found it to be 5.5%. He has decided to use the rate of change in the Consumer Price Index as a proxy for the inflationary expectations of investors. That annualized rate now stands at 3%. On the basis of the information that Carl has collected, what estimate can he make of the real rate of return?

#### Questions Cloud

 Explain what type of technological infrastructure : Explain What type of technological infrastructure would you consider in developing an international marketing strategy Explain why verizon has always had higher debt : Please describe the internet statement "Verizon has always had higher debt than some of its peers. There was some discussion about this inside the industry few years ago when they were deploying their IPTV services (FiOS). Bonds-carrying value and interest expense : A company issues \$5,000,000, 7.8%, 20-year bonds to yeild 8% on January 1, 2007. Using effective-interest amortization, what will the carrying value of bonds be on December 31, 2007 balance sheet? Semi-annual interest payments : The semi-annual interest payments that corporate bonds in the U.S. typically pay are conventionally referred to as Question on real rate of return : Carl Foster, a trainee at an investment banking firm, is trying to get an idea of what real rate of return investors are expecting in today's marketplace. On the basis of the information that Carl has collected, what estimate can he make of the rea.. Explain how can a company use technology such as internet : Explain How can a company use technology such as internet Explain marketing and advertising technology services : Explain Marketing and Advertising Technology Services and While the majority of the customers speak English Determining the future value : What is the future value of \$1500 after 5 years if the appropriate interest rate is 12%, compounded monthly? Explain using information technology for marketing : Explain Using Information Technology for Marketing and The organization that you work for is currently marketing products domestically

### Write a Review

#### Explain decision on purchase of new machinery

Explain Decision on purchase of new machinery through incremental cash flow analysis

#### Consolidation and noncontrolling interest

On January 1, 2010, Doone corporation acquired 60 percent of outstanding voting stock of Rockne company for 300,000 consideration. Make Doone's 2011 consolidated entries required by intra entity inventory transfers?

#### Describe dividend decisions

Describe Dividend decisions for the existence of dividend clienteles by measuring the average decline in stock price when the stock goes ex-dividend

#### Computing wal-mart-s original strategy for creating value

Wal-Mart, discount merchandiser, started by putting large stores in small Sunbelt towns that its competitors had neglected. Compute Wal-Mart's original strategy for creating value?

#### Describe identification of audit errors made by em

Describe Identification of Audit Errors made by EM and comparison of audit in compliance and Internal controls were reviewed in early 20x1 and EM determined that lack of segregation of duties existed in many areas of the company

#### Theories of interest rate determination

Define and compare the following theories: expectations theory, liquidity theory, market segmentation theory, and preferred habitat hypothesis theory.

#### What in accounting treatment on prior period items

What in Accounting Treatment on Prior Period Items and explain where in each of the following items should appear in the financial statements of a corporation

#### Explain the term bond valuation

Explain the term Bond valuation and What is the annual interest payment on the second issue

#### Effective rate of discounted loan

What is the effective rate of interest if the loan is for 1 year and is paid off in one payment at the end of the year? What is the effective rate of interest if the loan is for 1 month?

#### Interest rates and capital markets

Assume you are the manager in a manufacturing business. How are the capital markets relevant to effective performance of your job?

#### Bonds nominal yield to maturity

What is the current yield on these bonds and  What is the bond's nominal yield to maturity.

#### Much interest will you have earned in two yrs

You will deposit \$600 at the end of each month for next 12 months also \$800 each month for the subsequent12 months.

#### Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!