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Suppose you bought a 10 percent coupon bond one year ago for $950. The face value of the bond is $1,000. The bond sells for
Suppose you bought a 10 percent coupon bond one year ago for $950. The face value of the bond is $1,000. The bond sells for $985 today. If the inflation rate last year was 9 percent, what was your total real rate of return on this investment?
Answer
a. | -5.32 percent | |
b. | -4.88 percent | |
c. | 10.47 percent | |
d. | 9.78 percent | |
e. | 4.78 percent |
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