Question
Consider a 9.0% coupon bond that you bought one year ago for $930. You observe that the bond sells for $890 today. The bond has
Consider a 9.0% coupon bond that you bought one year ago for $930. You observe that the bond sells for $890 today. The bond has $1,000 face value and matures in 10 years.
a. What was your total dollar return on this investment over the past year?
b. What was your total nominal rate of return on this investment over the past year?
c. If the inflation rate last year was 4%, what was your total real rate of return on this investment?
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Intermediate Accounting
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
IFRS edition volume 2
978-0470613474, 470613475, 978-0470616314
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