1. Curtis bought an 8.5% annual coupon bond at par. One year later, he sold the bond at a quoted price of 98. During the year, market interest rates rose and inflation was 2.5%. What real rate of return did Curtis earn on this investment?
2. a. 6.70%
3. b. 6.50%
4. c. 6.40% d. 3.90% e. 3.40%