You earned a 71 nominal rate of return on your investments

Reference no: EM13616244

1. You earned a 7.1% nominal rate of return on your investments over the past year. But at the same time, the reported inflation rate was 3.1%. What was your real rate of return for the year (the percentage increase in your real wealth)? Enter answer as percents, accurate to 2 decimal places.

2. You want to make an average rate of return of 8.2% on your money. An acquaintance approaches you for a one-year loan. You think he's a pretty decent fellow, but estimate that there's a 1.9 % chance that the guy will pull a runner and you get nothing back. There's a further 3.2 % chance that he will cite 'financial difficulties' and only pay back 50% of the money owed. If that's the case, what interest rate must you charge him in order to make your desired rate of return in expectation? Enter answer in percents, accurate to 2 decimal places.

3. You invest $870 at 7% per year, and are waiting for it to grow to $9,072. How many years will you have to wait?

4. You want to have $1 million in your investment account in 18 years, and estimate that you ran earn an 6% rate of return. How much do you need to invest today (assuming you make no further contributions), in order to achieve your goal?

5. Assume your utility function is the cube root. If your current total wealth is 16.1 thousand dollars, what is the marginal utility of the next 500 dollars you will make?

Reference no: EM13616244

Questions Cloud

Sppose that x1 x2 x3 x4 and x5 is a random sample from a : suppose that x1 x2 x3 x4 and x5 is a random sample from a distribution with density function fx 1theta for 0ltxlttheta.

If an exercise scientist wants to estimate the proportion : in an october 2012 survey of 7786 randomly selected adults living in germany 5840 said they exercised for at least 30

Steve and his friends are relaxing at a local tavern the : steve and his friends are relaxing at a local tavern. the number of drinks that steves table receives is poisson

In a study of the effectiveness of garlic for lowering : in a study of the effectiveness of garlic for lowering cholesterol 17 subjects were treated with garlicin which is

You earned a 71 nominal rate of return on your investments : 1. you earned a 7.1 nominal rate of return on your investments over the past year. but at the same time the reported

Explain how do you declare a variable as binary or integer : explain how do you declare a variable as binary or integer in excel solver?1.briefly explain the results of a what-if

Find the mean and standard deviation for the number of : a government agency has specialists who analyze the frequencies of letters of the alphabet in an attempt to decipher

The time t between emissions radioactive emissions has an : the time t between emissions radioactive emissions has an eponential distribution with a mean of 4 seconds between

Several psychology students are unprepared for a surprise : several psychology students are unprepared for a surprise truefalse test with 11 questions and all of their answers or

User Account

All Pages