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Suppose you purchased a 10-year T-bond paying an 8% coupon at par two years ago. You just sold the bond and the dealer was quoting
Suppose you purchased a 10-year T-bond paying an 8% coupon at par two years ago. You just sold the bond and the dealer was quoting 111.29 - 111.31 when you sold. Assume the inflation rate was 3% in each of the years you held the bond. Determine your realized nominal return on this investment. Also, determine your realized real return.
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