What was your realized real return

Assignment Help Financial Management
Reference no: EM131192437

Suppose you earned a nominal 5% on your bank savings deposit, and actual inflation was 3.5%. What was your realized real return? If you had expected inflation to be 3%, what is your realized gain or loss in purchasing power versus what you expected? Provide your answer below as follows:

Realized return =

Realized gain or loss versus expectations =

Reference no: EM131192437

Questions Cloud

What will its approximate value be five years from now : Ben Collins plans to buy a house for $150,000. If the real estate in his area is expected to increase in value by 1 percent each year, what will its approximate value be five years from now?
Reported free cash flows : Free Cash Flow Iron Ore Corp. reported free cash flows for 2008 of $106 million and investment in operating capital of $189 million. Iron Ore listed $39 million in depreciation expense and $51 million in taxes on its 2008 income statement. What was I..
About purchasing new sand-casting equipment : Jetson Foundry is thinking about purchasing new sand-casting equipment that would reduce the time and cost of grinding customer orders to tolerance. The new equipment will cost $70,000 and it will take $15,000 to modify it for company needs. Evaluate..
Proposes to expand his restaurant supply business : Jim Krakauer proposes to expand his restaurant supply business by adding an HVAC repair unit. Currently his customers, almost all restaurant owners, buy or order equipment from his sow room floor or from a warehouse of used equipment located behind h..
What was your realized real return : Suppose you earned a nominal 5% on your bank savings deposit, and actual inflation was 3.5%. What was your realized real return? If you had expected inflation to be 3%, what is your realized gain or loss in purchasing power versus what you expected?
We are talking about historical cost principle : How to respond to this comment? We are talking about historical cost principle? Yes when a company holds the value of real estate over years it is going to do nothing but appreciate. As you said referring to machinery vs real estate items like that w..
The firm use to discount the project cash flows : Titan Mining Corporation has 9.8 million shares of common stock outstanding and 420,000 5 percent semiannual bonds outstanding, par value $1,000 each. What is the firm's market value capital structure? If the company is evaluating a new investment pr..
Discuss the motivations behind the unethical behavior : UBS and Morgan Stanley: An Elaborate Insider Trading Scheme. After reading the case discuss the motivations behind the unethical behavior, who was hurt by the unethical behavior, and explain the context and conditions that are thought to contribute t..
Procedure projected in the flexible budget estimate : The controller of the Conrad Aiken Surgical Center was reviewing monthly financial reports and noted some differences. The center had fallen 8 short of its plan to perform 450 procedures during the month. what was the total revenue per procedure proj..

Reviews

Write a Review

Financial Management Questions & Answers

  Break-even point be in terms of the closing price of stock

Assume an investor writes a call option for 100 shares at a strike price of 30 for a premium of 5.75. This is a naked option. What would the gain or loss be if the stock closed at 26? What would the break-even point be in terms of the closing price o..

  Calculation of wacc for common stock-preferred stock-bonds

Pumpkin Pie Industries has 5 million shares of common stock outstanding, 1 million shares of preferred stock outstanding, and 10 thousand bonds. If the common shares are selling for $50 per share, the preferred shares are selling for $31 per share, a..

  Intrinsic value of stock provides purchase price for stock

The intrinsic value of a stock provides a purchase price for a stock...

  Contribution to individual retirement account

You have just made a $1,500 contribution to your individual retirement account. Assume you earn a rate of return of 8.7 percent and make no additional contributions. How much more will your account be worth when you retire in 25 years than it would b..

  Share of this stock if your required rate of return

Orca, Inc. announced today that it will begin paying annual dividends. The first dividend will be paid next year in the amount of $1.74 a share. The following dividends will be $1.41, $1.99, and $2.2 a share annually for the following three years, re..

  What should be ranyards current stock price

Ranyard's beta is 1.13, and the last dividend per share paid was $4.21. The market risk premium is estimated to be 7.56%, and the real rate of interest is 2.04%. The liquidity risk premium is 0.7%. Analysts expect the company to grow at a rate of 3.5..

  Discuss the conditions under which an employer may desire to

Discuss the conditions under which an employer may desire to establish a profit sharing plan. Assume that an employer has had a profit sharing plan for several years and the reactions of the employees toward the plan have been unsatisfactory. Discuss..

  Find the overall market equity premium

You have the following information on two firms, A and B. The market rate of return is 6% and the risk-free rate of return is 1 %. Find the required return to equity for each firm, based on the Capital Market Pricing Model. Find the overall market eq..

  What single annual rate of interest

Bill Christenson deposited $40,000 in his credit union on September 23, 1993. Recently, while going through some papers he discovered the account. How much should Bill have in this account on September 23, 2015? If Bill had invested in a twenty-two y..

  How the method can be used by the trader

What Fibonacci method can be very helpful to a investment trader in either determining a stop that would allow staying with a major trend, or in finding an entry level for new positions? Explain how the method can be used by the trader.

  Bonds outstanding that are selling at par value

Jack's Construction Co. has 100,000 bonds outstanding that are selling at par value. The bonds yield 8.7 percent. The company also has 3.2 million shares of common stock outstanding. The stock has a beta of 1.3 and sells for $20 a share. The U.S. Tre..

  What is the divisor

Able, Baker, and Charlie are the only three stocks in an index. The stocks sell for $93, $312, and $78, respectively. Assume that Able undergoes a 1-for-2 reverse stock split. What is the divisor?

Free Assignment Quote

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!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd