Question: Problem 10-6 Bond Returns [LO 2] Consider the following information for a period of years: Arithmetic Mean Long-term government bonds 8.0 % Long-term corporate bonds

Problem 10-6 Bond Returns [LO 2]

Consider the following information for a period of years:

Arithmetic Mean
Long-term government bonds 8.0 %
Long-term corporate bonds 8.1
Inflation 3.6
a. What is the real return on long-term government bonds? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
b. What is the real return on long-term corporate bonds? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

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