Question: Return to Table 12.1 and calculate the real and nominal rates of return on the RRB bond in the second and third years. Table 12.1

Return to Table 12.1 and calculate the real and nominal rates of return on the RRB bond in the second and third years.

Table 12.1

Inflation in Year Coupon Principal Total Time Just Ended Par Value Payment + Repayment = Payment $1,000.00 1,020.00 $40.80 1,050.60 1,061.11 $40.80 42.02 1,103.55 2% $0 42.02 42.44 3 1,061.11

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