 Writing
The countries of Stabilato and Variato have the following average returns and st

### Question Description

I’m stuck on a Writing question and need an explanation.

Find the real return on the following investments:

 STOCK NOMINAL RETURN INFLATION A 10% 3% B 15% 8% C – 5% 2% Student has agreed that all tutoring, explanations, and answers provided by the tutor will be used to help in the learning process and in accordance with Studypool's honor code & terms of service. formula for Real return = (1+nominal return)/(1+inflation rate)-1

for stock A, Real return = (1.1/1.03)-1 = 6.80%

for stock B, Real return = (1.15/1.08)-1 = 6.48%

for stock C , Real return = (0.95/1.02)-1 = -6.86%

8) let varioto return be x ,

then from t-stat = mean of stabelito asset-mean of varieto asset)/sqrt(sigma1^2+sigma2^2)

t-stat = (1/2*(8%+5%) - x)/(sqrt( 0.03^2+0.02^2) should be <-2.14 or >2.14 for 95% of times

so range of x = (6.5% - sqrt( 0.03^2+0.02^2)*2.14 ,6.5% +sqrt( 0.03^2+0.02^2)*2.14)

=(-0.0121 ,0.1421)

=(-1.21% ,14.21%)

so range is ((-1.21% ,14.21%) khakaan (1456)
Cornell University Anonymous
Return customer, been using sp for a good two years now. Anonymous
Thanks as always for the good work! Anonymous
Excellent job Studypool 4.7 Trustpilot 4.5 Sitejabber 4.4 Brown University

1271 Tutors California Institute of Technology

2131 Tutors Carnegie Mellon University

982 Tutors Columbia University

1256 Tutors Dartmouth University

2113 Tutors Emory University

2279 Tutors Harvard University

599 Tutors Massachusetts Institute of Technology

2319 Tutors New York University

1645 Tutors Notre Dam University

1911 Tutors Oklahoma University

2122 Tutors Pennsylvania State University

932 Tutors Princeton University

1211 Tutors Stanford University

983 Tutors University of California

1282 Tutors Oxford University

123 Tutors Yale University

2325 Tutors