9-6 Rates of return Nominal ys. real 1+ real ror 1 nominal ror 1 inflation rate 1+ real ror=1+395=1.373 real ror=37.3%o Irwin/McGraw-Hill CThe McGraw-Hill Commpanies, Inc, 2001
©The McGraw-Hill Companies, Inc.,2001 9- 6 Irwin/McGraw-Hill Rates of Return Nominal vs. Real 1+ real ror = 1 + nominal ro r 1 + inflation rate real ror 37.3% 1+ real ror = 1.373 1+.016 1+.395 = =
9=7 Market Indexes Dow Jones Industrial Average ( The Dow Value of a portfolio holding one share in each of 30 large industrial firms Standard poor's Composite Index The s&p 500) Value of a portfolio holding shares in 500 firms. Holdings are proportional to the number of shares in the issues Irwin/McGraw-Hill CThe McGraw-Hill Commpanies, Inc, 2001
©The McGraw-Hill Companies, Inc.,2001 9- 7 Irwin/McGraw-Hill Market Indexes Dow Jones Industrial Average (The Dow) Value of a portfolio holding one share in each of 30 large industrial firms. Standard & Poor’s Composite Index (The S&P 500) Value of a portfolio holding shares in 500 firms. Holdings are proportional to the number of shares in the issues