Problem 12-4 Calculating Returns [LO1]

Suppose you bought a bond with an annual coupon rate of 6.2 percent one year ago for $900. The bond sells for $930 today.

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 percent rounded to 2 decimal places, e.g., 32.16.)

Nominal rate of return

%

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. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Real rate of return

%