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QUESTION 1 Last year, you earned a rate of return of 5.5 percent on your bond investments. During that time, the inflation rate was 1.5

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QUESTION 1 Last year, you earned a rate of return of 5.5 percent on your bond investments. During that time, the inflation rate was 1.5 percent. What was your real rate of return? 4.49 percent o 7.00 percent O 3.94 percent o 2.22 percent QUESTION 2 Quartzite, Inc. bonds have a face value of $1,000. The bonds carry a 6 percent coupon, pay interest semiannually, and mature in 15 years. What is the current price of these bonds if the yield to maturity is 4.5 percent? o $1,162.34 O $1,015.53 O $1,093.49 $1,125.83

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