a. Suppose you bought a 7% coupon bond one year ago for $1040. The bond sells for
Question:
Assuming a $1000 face value, what was your total dollar return on this investment over the past year?
b. What was your nominal rate of return on this investment over the past year?
c. If the inflation rate last year was 4%, what was your total real rate of return on this investment? Show your work.
Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a...
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a Computation of the Total Dollar Return on this investment This year y...View the full answer
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Related Book For 
Corporate Finance Core Principles and Applications
ISBN: 978-0077905200
3rd edition
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe, Bradford
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