Answer:
The real return for the stock 3 years ago is 1.47
Explanation:
In order to calculate to calculate the real return for the stock 3 years ago we would have to make first the following calculation Using geometric return:
(1+0.0285) = ((1+0.217)*(1+0.024)*(1+X)*(1-0.146))^(1/4)
X = 5.14%
Therefore, to calculate the real return we have to use the following formula:
Real return = ((1+nominal return)/(1+inflation rate)-1)*100
Real return=((1+0.0514)/(1+0.0362)-1)*100
Real return = 1.47
The real return for the stock 3 years ago is 1.47
