- +1-530-264-8006
- info@tutorsglobe.com

Stocks and the rate of inflation

Problem: The following table shows the nominal returns on U. S. stocks and the rate of inflation.

a. What was the standard deviation of the market returns?

b. Calculate the average real return.

Year Nominal Return (%) Inflation (%)

2004 12.5 3.3

2005 6.4 3.4

2006 15.8 2.5

2007 5.6 4.1

2008 -37.2 0.1

Now Priced at $25 (50% Discount)

Recommended **(97%)**

18,76,764

Questions

Asked

21,311

Experts

9,67,568

Questions

Answered

Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!

Submit Assignment
## Q : Cost of equity based on the dividend growth model

Q1. What is the cost of equity based on the dividend growth model? Q2. What is the cost of equity based on the security market line?