During a period of severe inflation, a bond offered a nominal HPR of 80% per year. The
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During a period of severe inflation, a bond offered a nominal HPR of 80% per year. The inflation rate was 70% per year.
a. What was the real HPR on the bond over the year?
b. Compare this real HPR to the approximation rreal ≈ rnom − i. p-963
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ISE Investments
ISBN: 9781266085963
13th International Edition
Authors: Zvi Bodie, Alex Kane, Alan Marcus
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