Question
Suppose you bought a bond with an annual coupon rate of 6.4 percent one year ago for $820. The bond sells for $880 today. A.
Suppose you bought a bond with an annual coupon rate of 6.4 percent one year ago for $820. The bond sells for $880 today.
A. Assuming a $1,000 face value, what was your total dollar return on this investment over the past year?
Total dollar return $????
B. What was your total nominal rate of return on this investment over the past year? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Nominal rate of return %????
C. If the inflation rate last year was 2.5 percent, what was your total real rate of return on this investment? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Real rate of return %????
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started