USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

question 67

Multiple Choice

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
Assume that during the past year the consumer price index increased by 1.5 percent and the securities listed below returned the following nominal rates of return.

-Refer to Exhibit 1.5. If next year the real rates all rise by 10 percent while inflation climbs from 1.5 percent to 2.5 percent, what will be the nominal rate of return on each security?

• A) 1.24% and 1.52%
• B) 1.35% and 3.52%
• C) 3.89% and 6.11%
• D) 3.52% and 3.89%
• E) 1.17% and 6.11%

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Definitions:

Group Differentiation

The process by which members of a group distinguish themselves from members of other groups through social, cultural, or physical markers.

Construct Validity

The extent to which a test may be said to accurately and thoroughly measure a particular construct or trait.

Construct Validity

The extent to which a test or instrument measures the theoretical construct or concept it is intended to measure.

Statistical Analyses

The collection of methods used to process, interpret, and draw conclusions from collected data.