Answered step by step
Verified Expert Solution
Link Copied!

Question

00
1 Approved Answer

Suppose you bought a $ 1 , 0 0 0 face value bond with a coupon rate of 5 percent one year ago. The purchase

Suppose you bought a $1,000 face value bond with a coupon rate of 5 percent one year ago. The purchase price was $980.8. You sold the bond today for $988.9. If the inflation rate last year was 1.8 percent, what was your exact real rate of return on this investment? ______%
Instruction: Enter your response as a percentage with two decimal places.
For example, if your answer is 0.1213=12.13%, please only enter "12.13", please do not enter "0.1213" or "12.13%", the system may not recognize the % sign. You may put negative signs if necessary,

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Finance questions