A portfolio manager invested $1,500,000 in bonds in 2007. In one year the market value of the

Question:

A manager invested $1,500,000 in bonds in 2007. In one year the market value of the bonds dropped to $1,485,000. The interest payments during the year totaled $105,000.
a. What was the manager's total rate of return for the year?
b. What was the manager's real rate of return if the inflation rate during the year was 2.3%?
Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...