Suppose the real rate is 56 and the nominal rate is 1124


1. Suppose the real rate is 5.6% and the nominal rate is 11.24%. Solve for the inflation rate. Use the Fisher Effect equation.

2. Suppose a stock had an initial price of $65.07 per share, paid a dividend of $5.8 per share during the year, and had an ending share price of $99.02. What are the percentage returns if you own 25 shares?

3. You own a portfolio invested 27.89% in Stock A, 13.66% in Stock B, 14.72% in Stock C, and the remainder in Stock D. The beta of these four stocks are 1.2, 0.7, 0.72, and 0.79. What is the portfolio beta?

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Financial Management: Suppose the real rate is 56 and the nominal rate is 1124
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