# Question: Suppose you bought a 7 5 percent coupon bond one year

Suppose you bought a 7.5 percent coupon bond one year ago for $1,030. The bond sells for $970 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?

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?

## Relevant Questions

Using the following returns, calculate the average returns, the variances, and the standard deviations for X and Y. A stock has a beta of 1.25, the expected return on the market is 11.5 percent, and the risk-free rate is 3.4 percent. What must the expected return on this stock be? Based on the following information, calculate the expected return and standard deviation for each of the following stocks. What is the covariance and correlation between the returns of the two stocks? Suppose you observe the following situation: a. Calculate the expected return on each stock. b. Assuming the capital asset pricing model holds and stock A’s beta is greater than stock B’s beta by .40, what is the ...In the previous problem, suppose the company’s stock has a beta of 1.2. The risk-free rate is 5.2 percent, and the market risk premium is 7 percent. Assume that the overall cost of debt is the weighted average implied by ...Post your question