Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Suppose you bought a 10 percent coupon bond one year ago for $1,030. The bond sells for $1,090 today. Required: (a) Assuming a $1,000 face

Suppose you bought a 10 percent coupon bond one year ago for $1,030. The bond sells for $1,090 today.


Required:
(a)

Assuming a $1,000 face value, what was your total dollar return on this investment over the past year?(Do not include the dollar sign ($).)


Total dollar return $
(b)

What was your total nominal rate of return on this investment over the past year?(Do not include the percent sign (%). Round your answer to 2 decimal places. (e.g., 32.16))


Nominal rate of return percent
(c)

If the inflation rate last year was 12 percent, what was your total real rate of return on this investment?(Negative amount should be indicated by a minus sign. Do not include the percent sign (%). Round your answer to 2 decimal places. (e.g., 32.16))


Real rate of return percent

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored 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

Recommended Textbook for

World Finance Since 1914

Authors: Paul Einzig

1st Edition

0415539471, 978-0415539470

More Books

Students also viewed these Finance questions