Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Problem 1 2 - 4 Calculating Returns ( LO 1 ) Suppose you bought a 8 . 8 % coupon bond one year ago for

Problem 12-4 Calculating Returns (LO1)
Suppose you bought a 8.8% coupon bond one year ago for $910. The bond sells for $870 today.
o. Assuming a $1,000 face value, what was your total dollar return on this investment over the past year? (Omit $ sign in your response.)
Total dollar return
$
b. What was your total nominal rate of return on this investment over the past year? (Round your answer to 2 decimal places.)
Nominal rate of return %
c. If the inflation rate last year was 4%, what was your total real rate of return on this investment? (Do not round intermediate calculations. Round the final answer to 2 decimal places. Use the Fischer formula in your calculations.)
Real rate of return %
image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Process To Profits Strategic Planning For A Growing Business

Authors: William Lasher

1st Edition

0324223870, 9780324223873

More Books

Students also viewed these Finance questions

Question

How organized or ready for action on this issue is this public?

Answered: 1 week ago

Question

What does this public know about your organization?

Answered: 1 week ago

Question

What does this public expect from your organization?

Answered: 1 week ago