Financial Investment part 4

1.          A year ago, you invested $10,000 in a savings account that pays an annual interest rate of 3%. What is your approximate annual real rate of return if the rate of inflation was 4% over the year?

• A.   1% 

• A. -1%

• A.   7%

• A.   3%

1.          A year ago, you invested $2,500 in a savings account that pays an annual interest rate of 5.7%. What is your approximate annual real rate of return if the rate of inflation was 1.6% over the year?

• A. 4.1%

• A.   2.5%

• A.   2.9%

• A.   1.6%

1.          A year ago, you invested $2,500 in a savings account that pays an annual interest rate of 2.5%. What is your approximate annual real rate of return if the rate of inflation was 3.4% over the year?

• A.   0.9%

• A.   -0.9%

• A.   5.9%

• A.   3.4%

1.          A year ago, you invested $12,000 in an investment that produced a return of 18%. What is your approximate annual real rate of return if the rate of inflation was 2% over the year?

• A.   18%   

• A.   2%

• A. 16%

• A.   15%

If the annual real rate of interest is 3.5% and the expected inflation rate is 2.5%, the nominal rate of interest would be approximately ______

• A.   3.5%

• A.   2.5%  

• A.   1%

• A.   6.8%

• A.   None of the options

1.           If the annual real rate of interest is 2.5% and the expected inflation rate is 3.4%, the nominal rate of interest would be approximately ______

• A.   4.9%

• A.   0.9%  

• A.   -0.9%

• A.   7%

• A.   None of the options

1.           If the annual real rate of interest is 4% and the expected inflation rate is 3%, the nominal rate of interest would be approximately ______

• A.   4%

• A.   3%  

• A.   1%

• A.   5%

• A.   None of the options

1.          You purchased a share of stock for $12. One year later you received $0.25 as a dividend and sold the share for $12.92. What was your holding period return?

• A. 9.75%

• A.   10.65%  

• A.   11.75%

• A.   11.25%

• A.   None of the options

1.          You purchased a share of stock for $120. One year later you received $1.82 as a dividend and sold the share for $136. What was your holding period return?

• A. 9.75%

• A.   10.65% 

• A.   11.75%

• A.   11.25%

• A.   None of the options

1.          You purchased a share of stock for $65. One year later you received $2.37 as a dividend and sold the share for $63. What was your holding period return?

• A. 0.57%

• A.   -0.2550%

• A.   -0.89%

• A.   1.63%

• A.   None of the options