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You have purchased a 3-year zero-coupon bond with face value of $1000 and a price of $800. You sold this bond after two years for
You have purchased a 3-year zero-coupon bond with face value of $1000 and a price of $800. You sold this bond after two years for a price of S900, what is your annual rate of return on this bond investment? If the inflation rate is 2% per year, what is your real annual rate of return?
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