Question

An analyst observes that the historic geometric nominal return for equities is 9%. Given a real return of 1% for riskless treasury bills and annual inflation of 2%, the real rate of return and risk premium for equities are closest to:

Answer 1

Answer:

LET THE THE PRINCIPLE BE 40,000

41/40=X/40,000

40,000*41/40

1,000 * 41

SO THE AMOUNT WILL BE 41,000

Answer 2

Explanation:

let the principle be Rs 40,000

41/40 = x/40,000

40,000×41/40

1000×41

41000

the real rate of return and risk premium for equities are closest to 41,000