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During a period of significant inflation, a bond earned an annual nominal return of 80%. The rate of inflation over the year was 70%. a.

During a period of significant inflation, a bond earned an annual nominal return of 80%. The rate of inflation over the year was 70%. a. Calculate the real holding period return for the year. b. Compare this real holding period return to the approximation formula rr rn i (real return = Nominal return inflation).

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