Question
Suppose you bought a 9.0% coupon bond one year ago for $930. The bond sells for $890 today. a. Assuming a $1,000 face value, what
Suppose you bought a 9.0% coupon bond one year ago for $930. The bond sells for $890 today.
a. Assuming a $1,000 face value, what was your total dollar return on this investment over the past year? (Omit $ sign in your response.)
Total dollar return $
b. What was your total nominal rate of return on this investment over the past year? (Round your answer to 2 decimal places.)
Nominal rate of return %
c. If the inflation rate last year was 4%, what was your total real rate of return on this investment? (Do not round intermediate calculations. Round the final answer to 2 decimal places. Use the Fischer formula in your calculations.)
Real rate of return %
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