Suppose you bought a bond with an annual coupon rate of 7.6 percent one year ago for $840. The bond sells for $885 today. a. Assuming a $1,000 face value, what was your total dollar return on this investment over the past year? b. What was your total nominal rate of return on this investment over the past year? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) c. If the inflation rate last year was 2.5 percent, what was your total real rate of return on this investment? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Suppose you bought a bond with an annual coupon rate of 7.6 percent one year ago for $840. The bond sells for $885 today. a. Assuming a $1,000 face value, what was your total dollar return on this investment over the past year? b. What was your total nominal rate of return on this investment over the past year? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) c. If the inflation rate last year was 2.5 percent, what was your total real rate of return on this investment? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Chapter8: Analysis Of Risk And Return
Section: Chapter Questions
Problem 9P
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|
Suppose you bought a bond with an annual coupon rate of 7.6 percent one year ago for $840. The bond sells for $885 today. |
| a. |
Assuming a $1,000 face value, what was your total dollar return on this investment over the past year? |
| b. | What was your total nominal |
| c. | If the inflation rate last year was 2.5 percent, what was your total real rate of return on this investment? (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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