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What real rate of return is earned by a one-year investor in a bond that was purchased for $1,000, has an 8 percent coupon, and

What real rate of return is earned by a one-year investor in a bond that was purchased for $1,000, has an 8 percent coupon, and was sold for $960 when the inflation rate was 7 percent?

3.72 percent

2.80 percent

-1.89 percent

5.39 percent

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