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Yesterday, you bought a 5-year, zero coupon, $1000 face-value Treasury bond with an interest rate (rrf) of 6.0%, for $747.2582. rinf (inflation) was 1.5% at
Yesterday, you bought a 5-year, zero coupon, $1000 face-value Treasury bond with an interest rate (rrf) of 6.0%, for $747.2582. rinf (inflation) was 1.5% at the time, but jumped to 3.5% overnight. Nothing elshas changed overnight. Today you sold the bond. What is your gain or loss on this investment? Hints: Gain = What you sell the bond for - what you paid to purchase the bond. (This is a proper algebraic equation that may produce a gain of less than zero). Assume rrf = rinf + all other treasury bond risks
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