Got Homework?

Connect with other students for help. It's a free community.

  • across
    MIT Grad Student
    Online now
  • laura*
    Helped 1,000 students
    Online now
  • Hero
    College Math Guru
    Online now

Here's the question you clicked on:

55 members online
  • 0 replying
  • 0 viewing

amyfair Group Title

when we calculate a portfolio's k is lesser than g, how do we assume the k or g in the futrue?

  • 2 years ago
  • 2 years ago

  • This Question is Closed
  1. abhishek_mick Group Title
    Best Response
    You've already chosen the best response.
    Medals 0

    The perpetual growth rate 'g' in the future is to be assumed as the nominal world GDP growth rate. A perpetual growth rate assumed to be larger than the world GDP growth rate would imply that the portfolio would in perpetuity become larger than the global GDP (which cannot be possible). Conclusion: Assume the perpetual growth rate to be equivalent to the global GDP growth rate (currently, assumed to be 3.5% - 4.0%(

    • 2 years ago
  2. xavier75 Group Title
    Best Response
    You've already chosen the best response.
    Medals 1

    theoretical it can´t be possible that g is higher than k, because the interest rates are higher than the inflation or the gdp growth the central banks always increases the rates in order to cotrol inflation and rememeber that in a econmy when their gdp increases in inflation goes behind

    • 2 years ago
    • Attachments:

See more questions >>>

Your question is ready. Sign up for free to start getting answers.

spraguer (Moderator)
5 → View Detailed Profile

is replying to Can someone tell me what button the professor is hitting...


  • Teamwork 19 Teammate
  • Problem Solving 19 Hero
  • You have blocked this person.
  • ✔ You're a fan Checking fan status...

Thanks for being so helpful in mathematics. If you are getting quality help, make sure you spread the word about OpenStudy.

This is the testimonial you wrote.
You haven't written a testimonial for Owlfred.