Assume that the economy has an annual inflation rate of 5 percent. Are the following investments profitable in real terms? You do not need to explain your answer.   (a) A$1,000 face-value bond, which you purchase at a 30% discount, that pays a monthly coupon of$4.   (b) A$1 million house the increases in price by$45,000 per year. You do not rent out the house, nor do you undertake renovations.   (c) A$1 million house that you renovate for$45,000 over the course of a year, causing the price to increase to$1.1 million.

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A: * SOLUTION :-  * (10)

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