This preview shows page 1. Sign up to view the full content.
Unformatted text preview: percent to fraction)
(convert Components of Interest
Components Safe Rate (about 2%)
Inflation Rate (now around 4%)
Risk Premium (depends on investment)
Motivation Premium (usually small)
Dealt with by Multiplication (1.02)(1.04)(1.09)(1.001) = 1.1574 15.74% If inflation is not included = Real Rate If inflation is included = Nominal Rate...
View Full Document
This note was uploaded on 02/02/2013 for the course ECON 361 taught by Professor Paulbradley during the Spring '13 term at SIU Carbondale.
- Spring '13