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QUESTION 10.04: Calculating Returns Chapter 10 Question 4 Suppose you bought a bond with an annual coupon rate of 5.5 percent one year ago for
QUESTION 10.04: Calculating Returns Chapter 10 Question 4 Suppose you bought a bond with an annual coupon rate of 5.5 percent one year ago for $1,017. The bond sells for $1,041 today. Input area: a. Assuming a $1,000 face value, what was your total dollar return on this investment over the past year? b. What was your total nominal rate of return on this investment over the past year? c. If the inflation rate last year was 3 percent, what was your total real rate of return on this investment? Summarize your results in a short paragraph. Coupon paid Initial price Ending price Inflation rate Output area: a. Dollar return b. Nominal return C. Real return
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