What was the real interest rate earned on an ounce of gold

Reference no: EM131506766

Question: In January of 1980, a troy ounce of gold sold for $850 (an all-time high). Over the past 28 years, suppose the CPI has grown at a compounded annual rate of 3.2%. Today a troy ounce of gold sells for $690. (8.2)

a. In real terms, with 1980 as the reference year, what is today's price of gold per ounce in 1980 purchasing power?

b. If gold increases in value to keep pace with the CPI, how many years will it take to grow to $850 per ounce in today's purchasing power?

c. What was the real interest rate earned from 1980 to 2010 on an ounce of gold?

Reference no: EM131506766

Questions Cloud

How does subjectivity creep into their writing : What might get in the way of their objective treatment of texts and topics? How does subjectivity creep into their writing

What is annuity worth in terms of single equivalent amount : An annuity provides for 10 consecutive end-of-year payments of $72,000. What is the annuity worth in terms of a single equivalent amount of today’s dollars?

Characteristics of one of their unique product designs : Select a company and provide two characteristics of one of their unique product designs. Explain how this product design is related to their business strategy.

Create a common-sized income statement for the three years : Create a common-sized income statement for the three years. What conclusions can you draw from the different parts of the statement?

What was the real interest rate earned on an ounce of gold : In January of 1980, a troy ounce of gold sold for $850 (an all-time high). Over the past 28 years, suppose the CPI has grown at a compounded annual rate of 3.2%

What is risk-free rate of return that must exist in market : Assuming no arbitrage opportunities, what are the values of the unit claims, at time 0? What is the risk-free rate of return that must exist in this market?

Determine the indifference point : A. Given these two alternatives, determine the indifference point (where total costs are equal).

What is the profitability index using a discount rate : What is the profitability index using a 14% discount rate? What does this mean?

What is the total cost of a four-year college education : Suppose it costs $18,000 per year (in early 2014 dollars) for tuition, room, board, and living expenses to attend a public university.

User Account

All Pages