5-1Copyright©2017McGraw-HillEducation.Allrightsreserved.NoreproductionordistributionwithoutthepriorwrittenconsentofMcGraw-HillEducationChapter05TestBank-StaticStudent:___________________________________________________________________________MultipleChoiceQuestions1.Overthepastyear,youearnedanominalrateofinterestof10%onyourmoney.Theinflationratewas5%overthesameperiod.TheexactactualgrowthrateofyourpurchasingpowerwasA.15.5%.B.10.0%.C.5.0%.D.4.8%.E.15.0%.2.Overthepastyear,youearnedanominalrateofinterestof8%onyourmoney.Theinflationratewas4%overthesameperiod.TheexactactualgrowthrateofyourpurchasingpowerwasA.15.5%.B.10.0%.C.3.8%.D.4.8%.E.15.0%.3.Ayearago,youinvested$1,000inasavingsaccountthatpaysanannualinterestrateof9%.Whatisyourapproximateannualrealrateofreturniftherateofinflationwas4%overtheyear?A.5%B.10%C.7%D.3%4.Ayearago,youinvested$10,000inasavingsaccountthatpaysanannualinterestrateof5%.Whatisyourapproximateannualrealrateofreturniftherateofinflationwas3.5%overtheyear?A.1.5%B.10%C.7%D.3%E.Noneoftheoptionsarecorrect.5.Iftheannualrealrateofinterestis5%,andtheexpectedinflationrateis4%,thenominalrateofinterestwouldbeApproximatelyA.1%.B.9%.C.20%.D.15%.6.Iftheannualrealrateofinterestis2.5%,andtheexpectedinflationrateis3.7%,thenominalrateofinterestwouldbeapproximatelyA.3.7%.B.6.2%.C.2.5%.D.–1.2%.5-2Copyright©2017McGraw-HillEducation.Allrightsreserved.NoreproductionordistributionwithoutthepriorwrittenconsentofMcGraw-HillEducation7.Youpurchasedashareofstockfor$20.Oneyearlater,youreceived$1asadividendandsoldthesharefor$29.Whatwasyourholding-periodreturn?A.45%B.50%C.5%D.40%E.Noneoftheoptionsarecorrect.8.Youpurchasedashareofstockfor$68.Oneyearlater,youreceived$3.00asadividendandsoldthesharefor$74.50.Whatwasyourholding-periodreturn?A.12.5%B.14.0%C.13.6%D.11.8%9.Whichofthefollowingdetermine(s)thelevelofrealinterestrates?I)ThesupplyofsavingsbyhouseholdsandbusinessfirmsII)ThedemandforinvestmentfundsIII)Thegovernment'snetsupplyand/ordemandforfundsA.IonlyB.IIonlyC.IandIIonlyD.I,...
