Suppose you bought a bond with a 6 percent coupon rate one year ago for $1,010. The

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Suppose you bought a bond with a 6 percent coupon rate one year ago for $1,010. The bond sells for $1,025 today.

a. Assuming a $1,000 face value, what was your total dollar return on this investment over the past year?

b. What was your total nominal rate of return on this investment over the past year?

c. If the inflation rate last year was 3 percent, what was your total real rate of return on this investment?

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Corporate Finance

ISBN: 9781265533199

13th International Edition

Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe

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Question Posted: Nov 29, 2023 12:54 AM

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Suppose you bought a bond with a 6 percent coupon rate one year ago for $1,010. The

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a To calculate the total dollar return on the investment over the past year we need to consider the ...View the full answer

Corporate Finance

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