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A bond with a face value of $1,000 has 10 years until maturity, carries a coupon rate of 8.7%, and sells for $1,130. Interest is
A bond with a face value of $1,000 has 10 years until maturity, carries a coupon rate of 8.7%, and sells for $1,130. Interest is paid annually. (Assume a face value of $1,000 and annual coupon payments.) a. If the bond has a yield to maturity of 9.3% 1 year from now, what will its price be at that time? (Do not round intermediate calculations. Round your answer to nearest whole number.) Answer is complete and correct. $ 964 Price b. What will be the rate of return on the bond? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Negative amount should be indicated by a minus sign.) Answer is complete but not entirely correct. Rate of return 8 .54 % c. If the inflation rate during the year is 3%, what is the real rate of return on the bond? (Assume annual interest payments.) (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Negative amount should be indicated by a minus sign.) Answer is complete but not entirely correct. Real rate of return 11.20 %
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