Problem 10-4 Calculating Returns [LO 1]

Suppose you bought a bond with a coupon rate of 8.1 percent one year ago for $904. The bond sells for $940 today.

Required:

(a)	Assuming a $1,000 face value, what was your total dollar return on this investment over the past year?

Total dollar return

$

(b)	What was your total nominal rate of return on this investment over the past year? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)

Total nominal rate of return

%

(c)	If the inflation rate last year was 4.1 percent, what was your total real rate of return on this investment? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)

Total real rate of return

%