Question: You just learned that a well - established company will issue a bond with a maturity of 1 0 0 years. The bond appears to

You just learned that a well

-

established company will issue a bond with a maturity of

100

years. The bond appears to be a good deal because it yields

7.92

percent. Assuming that the inflation rate stays at

3.42

percent, what is the bond

s real rate of return today? If you are looking for a bond to purchase and hold for several years, will you buy this bond? Explain your answer in terms of future inflation projections and the length of the bond's maturity.

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