Carl Foster, a trainee at an investment banking firm, is trying to get an idea of what real rate of return investors a
Posted: Wed Mar 30, 2022 3:37 pm
Carl Foster, a trainee at an investment
banking firm, is trying to get an idea of what real rate of
return investors are expecting in today's marketplace. He has
looked up the rate paid on 3-month U.S. Treasury bills and
found it to be 3.5%. He has decided to use the recent
rate of change in the Consumer Price Index as a proxy for the
inflationary expectations of investors. That annualized rate now
stands at0.8%. On the basis of the information that Carl
has collected, what estimate can he make of the real rate
of return?
The estimate of the real rate of return is: (Round to one
decimal place.)
banking firm, is trying to get an idea of what real rate of
return investors are expecting in today's marketplace. He has
looked up the rate paid on 3-month U.S. Treasury bills and
found it to be 3.5%. He has decided to use the recent
rate of change in the Consumer Price Index as a proxy for the
inflationary expectations of investors. That annualized rate now
stands at0.8%. On the basis of the information that Carl
has collected, what estimate can he make of the real rate
of return?
The estimate of the real rate of return is: (Round to one
decimal place.)