1. You earned 12% on your investments last year. During that time period, inflation averaged 6 percent. What was your real rate of return based on the Fisher formula?

2. A 10 year bond was issued three years ago. It pays 5% coupon semi-annually, and has a yield to maturity of 6%, what is the current market price of the bond?

3. A bond currently has a YTM of 8%. The bond matures in 3 years and pays interest semi-annually. The coupon rate is 7%. What is the current price of this bond?

Answer rating: 100% (QA)

Heres how to solve each problem 1 Real rate of return Use the Fisher formula Real Return 1 Nominal R... View the full answer