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Jack bought a five-year 4.25% annual coupon bond for $974 a year ago. Today, he sold the bond at the market yield of 4%. What
Jack bought a five-year 4.25% annual coupon bond for $974 a year ago.
Today, he sold the bond at the market yield of 4%.
What is Jack's approximate real rate of return if the inflation rate over the past year was 2.2%?
a) 1.80%
b) 2.05%
c) 5.76%
d) 5.98%
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