Question
Required rate of return on a bond A 10 per cent $100 government bond that pays interest annually, and currently is 5 years from maturity,
Required rate of return on a bond
A 10 per cent $100 government bond that pays interest annually, and currently is 5 years from maturity, is selling for $103.29. What is the required rate of return (yield) on this bond? What is the implied real interest rate if the expected inflation rate is 5 per cent per annum.
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Fundamentals of Financial Management
Authors: Eugene F. Brigham, Joel F. Houston
11th edition
324422870, 324422873, 978-0324302691
