Suppose that you buy a twoyear 8.2% bond at its face value, answer the following: a1....
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Suppose that you buy a twoyear 8.2% bond at its face value, answer the following: a1. What will be your total nominal return over the two years if inflation is 3.2% in the first year and 5.2% in the second? a2. What will be your total real return? b. Now suppose that the bond is a TIPS. What will be your total 2year real and nominal returns? Complete this question by entering your answers in the tabs below. Required A Required B a1. What will be your total nominal return over the two years if inflation is 3.2% in the first year and 5.2% in the second? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. a2. What will be your total real return? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. a1. Nominal return a2. Real return % % < Required A Required B > Show less
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a 1 To calculate the total nominal return we need to account for both years ret... View the full answer
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
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