As long as the inflation rate is positive the real rate of


A. Suppose a stock had an initial price of $77 per share, paid a dividend of $1.3 per share during the year, and had an ending share price of $92. Compute the percentage total return.____

B. As long as the inflation rate is positive, the real rate of return on a security will be ____ the nominal rate of return.

C. Over a 30-year period an asset had an arithmetic return of 13 percent and a geometric return of 10.5 percent. Using Blume's formula, what is your best estimate of the future annual returns over the next 10 years?

11.18 percent

12.04 percent

11.84 percent

12.22 percent

12.46 percent

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Financial Management: As long as the inflation rate is positive the real rate of
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