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Suppose you buy a bond for $1,020 with a 15-year maturity paying an annual coupon of $80. A year later interest rates have dropped and
Suppose you buy a bond for $1,020 with a 15-year maturity paying an annual coupon of $80. A year later interest rates have dropped and the bonds price has increased to $1,050. What are your nominal and real rates of return? Assume the inflation rate is 4%.
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