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If, while you are holding a coupon bond, the interest rates on other similar bonds fall, you can be sure that the coupon payments on
If, while you are holding a coupon bond, the interest rates on other similar bonds fall, you can be sure that
the coupon payments on your bond will fall.
the market price of your bond will rise.
the market price of your bond will fall.
the par value of your bond will rise.
If the nominal interest rate is 5%, the tax rate is 25%, and the expected inflation rate is 3%, what is the real after-tax return?
-0.75%
0.75%
1.5%
6.75%
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