Need assistance with using a Internet site to chart the price history of the coca cola company over the past five years (2006 - 2010).
You can simply look at the purchase price in each year from 2006 and the selling price today in 2010. It is better to sort your historical stocks by clicking "monthly." After finding the stock price in each year, present your results in a table such as the following:
1) Now use the information from the price history to calculate the nominal and real rate of return. [Nominal refers to the actual dollar price of stuff when it's bought or sold. The contrast is with the term real, which is actual value adjusted for inflation.] You need to calculate the returns only for 2006 and 2010.
To Calculate Nominal Return using Apple (stock symbol is AAPL).
The real rate of return adjusts the nominal rate of return for inflation. Therefore if we assume the inflation rate is 3% per year, we get the following:
Real rate of return = nominal rate of return - inflation
2) On February 18, 2010 the Fed announced that they would increase the discount rate (rate at which banks borrow reserves) after one year of extraordinary lows. Think about the industry your selected stock is in. How do increased interest rates affect the price of your stock? Explain.