Question: 17 Problem 12-4 Calculating Returns (LO1] 0.39 points Suppose you bought a bond with an annual coupon rate of 7.4 percent one year ago for
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17 Problem 12-4 Calculating Returns (LO1] 0.39 points Suppose you bought a bond with an annual coupon rate of 7.4 percent one year ago for $900. The bond sells for $940 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? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) c. If the inflation rate last year was 2 percent, what was your total real rate of return on this investment? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Answer is complete but not entirely correct. $ 114 a. Total dollar return b. Nominal rate of return c. Real rate of return 12.67% 9.39 X %
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