Question: A bond has 8 years until maturity, a coupon rate of 8%, and sells for $1,100. a. If this bond has a yield to maturity

A bond has 8 years until maturity, a coupon rate of 8%, and sells for $1,100.

a. If this bond has a yield to maturity of 8% 1 year from now, what will its price be?

b. What will be the rate of return on the bond?

c. If the inflation rate during the year is 3%, what is the real rate of return on the bond?

A bond has 8 years until maturity, a coupon rate

8.00 lyears Tme Coupon rate Price YTM Inflation 8% 1,100.00 890 3%

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