________ 19. Last year, you invested in a bond and earned a 7.4 percent rate of return. What was your exact real rate of

return if inflation was 4.1 percent for the year?

a. 3.17 percent b. 3.22 percent c. 3.30 percent d. 3.41 percent

________ 20. One year ago, you purchased a 5-year, $1,000 face value, 6 percent coupon bond for $1,012. Interest

is paid semi-annually. Today, you sold the bond at a market rate of return of 6.27 percent. What is your

total return in dollars on this investment?

a. -$21.42 b. $38.58 c. $48.00 d. $81.42