Question
Suppose that you buy a 1-year maturity bond for $1,000 that will pay you $1,000 plus a coupon payment of $67 at the end of
Suppose that you buy a 1-year maturity bond for $1,000 that will pay you $1,000 plus a coupon payment of $67 at the end of the year.
a. What real rate of return will you earn if the inflation rate is 2.7 percent? (Round your answer to 2 decimal places. Use minus sign to enter negative real rate of return, if any.)
Real rate of return % |
b. What real rate of return will you earn if the inflation rate is 3.3 percent? (Round your answer to 2 decimal places. Use minus sign to enter negative real rate of return, if any.)
Real rate of return % |
c. What real rate of return will you earn if the inflation rate is 5.3 percent? (Round your answer to 2 decimal places. Use minus sign to enter negative real rate of return, if any.)
Real rate of return % |
d. What real rate of return will you earn if the inflation rate is 6.6 percent? (Round your answer to 2 decimal places. Use minus sign to enter negative real rate of return, if any.)
Real rate of return % |
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