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Suppose that you buy a 1-year maturity bond for $950 that will pay you $950 plus a coupon payment of $55 at the end of
Suppose that you buy a 1-year maturity bond for $950 that will pay you $950 plus a coupon payment of $55 at the end of the year. a. What real rate of return will you earn if the inflation rate is 2.5 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 3.5 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 5.5 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 7.5 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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