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Suppose you bought a bond with an annual coupon of 7 percent one year ago for $970. The bond sells for $940 today. Assuming a
Suppose you bought a bond with an annual coupon of 7 percent one year ago for $970. The bond sells for $940 today.
- Assuming a $1,000 face value, what was your total dollar return on this investment over the past year?
- What was your total nominal rate of return on this investment over the past year?
- If the inflation rate last year was 3 percent, what was your total nominal rate of return on this investment?
- Complete the following analysis. Do not hard code values in your calculations.
- Dollar Return: What is the formula for excel?
- Nominal return: What is the formula for excel?
- Real Return: What is the formula for excel?
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