Calculate the Nominal Return, Real Return, and Risk Premium for the Following

question 83

Essay

Calculate the nominal return, real return, and risk premium for the following common stock investment:
$$\begin{array} { | c | c | } \hline \text { Purchase price } & \$ 60.00 \text { per share } \\\hline \text { Dividend } & \$ 3.50 \text { per year } \\\hline \text { Sales price } & \$ 73.00 \text { per share } \\\hline \text { Treasury bill yield } & 8.5 \% \\\hline \text { Inflation rate } & 7.5 \% \\\hline\end{array}$$

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Definitions:

Complimenting

Expressing praise, admiration, or approval towards someone, often enhancing positive interpersonal relations and self-esteem.

Foot-In-The-Door Tactic

A persuasion strategy involving getting a person to agree to a small request to increase the likelihood of agreeing to a larger request later.

Compliance

The act of conforming to a request, demand, or regulation, often motivated by a desire to gain approval or to avoid conflict.

Elaboration-Likelihood Model

A theory distinguishing two pathways of persuasion: a central route, which involves careful thinking and deliberation, and a peripheral route, which relies on superficial cues.