1. Calculate the real dollar rate of return on a bottle of a rare Burgundy, Doma

Question

1. Calculate the real dollar rate of return on a bottle of a rare Burgundy, Domaine de la Romanée-Conti 1978, whose price rises from $225 to $275 in a year, while all dollar prices increased by 8 percent.The real rate of return will be ___ percent (Enter your response as a percentage rounded to one decimal place.)

2. Calculate the real dollar rate of return on a painting whose price rises from $150,000 to $200,000 in a year, while all dollar prices increased by 4 percent.The real rate of return will be __ percent (Enter your response as a percentage rounded to one decimal place.)

3. In Munich a bratwurst costs 2 euros; a hot dog costs $4.00 at Boston's Fenway Park. At an exchange rate of $1.10/per euro, what is the price of a bratwurst in terms of hot dogs? The relative price of bratwurst is ____ hot dogs (Enter your response rounded to two decimal places.)

Explanation / Answer

1.

nominal rate of return=(275-225)/225=22.22%

real rate of return=((1+22.22%)/(1+8%))-1

=13.17%

the above is the answer

we do only one question based on Chegg rule.

Related Questions

Navigate

• Browse (All)
• Browse 1
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.