Item$10$

eBook References Item $10$

Suppose that you buy a $1-$year maturity bond for $$1,000$ that will pay you $$1,000$ plus a coupon payment of $$66$ at the end of the year.

a$.$ What real rate of return will you earn if the inflation rate is $2\mathrm{.}6$ percent? $($Round your answer to $2$ decimal places. Use minus sign to enter negative real rate of return, if any.$)$

Real rate of return $\%$

b$.$ What real rate of return will you earn if the inflation rate is $3\mathrm{.}4$ percent? $($Round your answer to $2$ decimal places. Use minus sign to enter negative real rate of return, if any.$)$

Real rate of return $\%$

c$.$ What real rate of return will you earn if the inflation rate is $5\mathrm{.}4$ percent? $($Round your answer to $2$ decimal places. Use minus sign to enter negative real rate of return, if any.$)$

Real rate of return $\%$

d$.$ What real rate of return will you earn if the inflation rate is $6\mathrm{.}8$ percent? $($Round your answer to $2$ decimal places. Use minus sign to enter negative real rate of return, if any.$)$

Real rate of return