Posted: July 31st, 2022

Suppose you bought a 7 percent coupon bond one year ago for $860. The bond sells for $890 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? (Round your answer to 2 decimal places. (e.g., 32.16))

Nominal rate of return %

c.

If the inflation rate last year was 1.5 percent, what was your total real rate of return on this investment? (Round your answer to 2 decimal places. (e.g., 32.16))

Real rate of return %

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