Heres the problem. I have a list of nominal rates (percentages) and need to use them to make colums of "real rates".
What formula do I use and how do I enter it?
Nominal Returns.................................................Real Returns
Large Stocks...Small Stocks....Inflation........Large Stocks...Small Stocks
11.62%................0.30%...............-1.50................?...........................?
37.49%................22.03%.............-2.03................?...........................?
I know the answer to the first "Large Stock Real Return" should be 10.12%. The equation I used in my calculater is...
(1+.1162/1-.0150) -1 =.1012
(1+nominal / 1+interest rate) -1
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