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Pavel [41]
2 years ago
13

"You’ve observed the following returns on Crash-n-Burn Computer’s stock over the past five years: 6 percent, –13 percent, 24 per

cent, 18 percent, and 15 percent. The average inflation rate over this period was 3 percent and the average T-bill rate was 4.35 percent. What was the average real return on the company's stock? [First find average of the nominal returns and use Fisher's equation to find average real return]"
Business
1 answer:
Vanyuwa [196]2 years ago
7 0

Answer:

6.80%

Explanation:

The average nominal returns is the sum of the returns for 5 years divided by the number of returns considered( i.e 5, 5 returns for 5 years)

average nominal returns=(6%-13%+24%+18%+15%)/5

average nominal returns=10.00%

The Fisher's equation is shown thus:

(1 + i)  = (1 + r) (1 + π)

i=nominal return=10.00%

r=average real return=the unknown

π=inflation rate=3%

(1+10.00%)=(1+r)*(1+3%)

1.10=(1+r)*1.03

1+1=1.10/1.03

r=(1.10/1.03)-1

r=6.80%

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nalin [4]

Solution:

1. The average snowfall in cincinnati over this period was 28 inches.

In the city cincinnati, snowfall (inches) in january and february is 18 and 38 respectively :

                   Average snowfall = {18+38}/{2} = 28 inches    

2. If the march data on snowfall is above the average (i.e 28 inches), The monthly average will rise.

If the march data on snowfall is above the average snowfall in January and February (i.e 28 inches), the monthly average will rise because, any snowfall data in march which is greater than 28 inches will lead to rise in monthly average.

For e.g  , suppose, If we consider snowfall (inches) in march is 30 inches, than monthly average is :

Monthly average snowfall= {18+38+31} / {3}= 29 inches

which is greater than 28 inches.

Therefore, If the march data on snowfall is above the average (i.e 28 inches), The monthly average will rise.

8 0
3 years ago
Differential Chemical produced 14,000 gallons of Preon and 28,000 gallons of Paron. Joint costs incurred in producing the two pr
Sveta_85 [38]

Answer: $4680

Explanation:

The joint cost allocated to Preon will be calculated below as:

Preon's value will be:

= 14000 × $6.00

= $84000

Paron's value will be:

= 28000 × $2.00

= $56000

Total value = Preon's value + Paron's value

= $84000 + $56000

= $140000

The joint cost allocated to Preon will be

= 7800 × 84000/140000

= $4680

3 0
3 years ago
Your cousin is currently 11 years old. She will be going to college in 7 years. Your aunt and uncle would like to have $ 95 comm
zalisa [80]

Answer:

$72,679.976

Explanation:

The computation of present value is shown below:-

Present value = Future value ÷ (1 + Rate of return)^Number of years

= $95,000 ÷ (1 + 3.9%)^7

= $95,000 ÷ (1 + 0.039)^7

= $95,000 ÷ (1.039)^7

= $95,000 ÷ 1.307100055

= $72,679.97553

or

= $72,679.976

Therefore for computing the present value we simply applied the above formula.

5 0
3 years ago
In recent years, there has been a large push for an increase in the use of renewable resources to produce the energy we need to
GaryK [48]

Hi there!

Answer:

Total cost with gasoline : $ 62.50

Total cost with E85 : $63.33

Explanation:

First, we must calculate the consumption in gallons of each type of fuel.

<em>For gas </em>

500 miles/28 miles * 1 gallon = 17.86 gallons

<em>For E85  </em>

500 miles/22.5 miles * 1 gallon = 22.22 gallons

With that, all we have to do is calculate the total cost in dollars .

<em>For gas </em>

17.86 galons * $3.5/gallon = $62.50

<em>For E85 </em>

22.22 galons * $2.85/gallon = $63.33

6 0
3 years ago
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gogolik [260]

Answer:

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Explanation:

The reason is that at this stage, the amendment decisions are made to control the flow of the execution which includes the corrective actions required to acquired the desired outcome of the execution plan. So the correct option is option A.

8 0
3 years ago
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