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You purchased a $1,000 bond with a coupon rate of 6% on January 1, 2021 for $940. On the same date you also purchased a
You purchased a $1,000 bond with a coupon rate of 6% on January 1, 2021 for $940. On the same date you also purchased a share of ABC Inc for $83. During 2021 you received a dividend of $1.50 on the ABC share. It is now January 1, 2022 and the bond is selling for $980 and the ABC share is worth $90.
Required, round all answers to two decimal points and either provide your calculations in the space provided below or submit them to the drop box provided in the Assignments area:
- What was your total dollar return on the bond over the past year?
- What was your total nominal return on the bond over the past year?
- If the inflation rate last year was 4%, what was your total real rate of return on the bond?
- Compute the total percentage return on the ABC share.
- What was the dividend yield on the ABC share.
- What was the capital gain yield on the ABC share.
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