Sue purchased a stock for $20 a share, held it for one year, received a $2.59 dividend, and sold the stock for $31. What exact real rate of return did she earn if the inflation rate during that year is 2.10 %?

Multiple Choice

• 64.50%

• 51.60%

• 96.74%

• 77.39%

How much would be the loss in price if an investor purchased a 18-year bond with a $1,000 par value, a 5% coupon paid annually and a 8% yield to maturity at the beginning, only to see market interest rates increase to 15% one year later?

Multiple Choice

• $258.85

• $323.56

• $355.92

• $226.49