Problem 10-4 Calculating Returns [LO 1]

Suppose you bought a 7.4 percent coupon bond one year ago for $897. The bond sells for $926 today.

Required:

(a)	Assuming a $1,000 face value, what was your total dollar return on this investment over the past year?(Do not include the dollar sign ($).)

Total dollar return

$

(b)	What was your total nominal rate of return on this investment over the past year?(Do not include the percent sign (%). Round your answer to 2 decimal places (e.g., 32.16).)

Total nominal rate of return

%

(c)	If the inflation rate last year was 4.4 percent, what was your total real rate of return on this investment?(Do not include the percent sign (%). Round your answer to 2 decimal places (e.g., 32.16).)

Total real rate of return

%