Series Arithmetic Mean What was the arithmetic average annual return on large-co

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What was the arithmetic average annual return on large-company stocks in nominal terms?

(Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)

What was the arithmetic average annual return on large-company stocks in real terms?

(Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)

Explanation / Answer

a Arithmatic Average Yeraly nominal return for Large company stocks =15.3% b Inflation Rate =3.5% (1+Nominal rate)=(1+Real Rate)*(1+Inflation) 1.153=1.035*(1+Real Rate) Real Rate =11.40% Arithmatic Average Yeraly return for Large Company Stocks in Real term=11.4%

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