View the step-by-step solution to:

# Suppose you bought a 7 percent coupon bond one year ago for \$1,040. The bond sells for \$1,070 today. Required:

Suppose you bought a 7 percent coupon bond one year ago for \$1,040. The bond sells for \$1,070 today.

Required:

(a)

Assuming a \$1,000 face value, what was your total dollar return on this investment over the past year? (Do not include the dollar sign (\$).)

Total dollar return \$

(b)

What was your total nominal rate of return on this investment over the past year? (Do not include the percent sign (%). Round your answer to 2 decimal places. (e.g., 32.16))

Nominal rate of return percent

(c)

If the inflation rate last year was 4 percent, what was your total real rate of return on this investment? (Do not include the percent sign (%). Round your answer to 2 decimal places. (e.g., 32.16))

Real rate of return percent

Dear Student,... View the full answer

Suppose you bought a 7 percent coupon bond one year ago for \$1,040. The bond sells for
\$1,070 today.
Required:
(a)
Assuming a \$1,000 face value, what was your total dollar return on this investment...

## This question was asked on Nov 01, 2010 and answered on Nov 01, 2010.

### Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors and customizable flashcards—available anywhere, anytime.

### -

Educational Resources
• ### -

Study Documents

Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access or to earn money with our Marketplace.

Browse Documents