Suppose you bought a bond with an annual coupon rate of 5.2 percent one vear ago for $920. The bond sells for $970 today. a. Assuming a $1,000 face value, what was your total dollar return on this investment over the past year? o. 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.) :. If the inflation rate last year was 1.5 percent, what was your total real rate of return on this investment? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. Total dollar return b. Nominal rate of return % c. Real rate of return %
Suppose you bought a bond with an annual coupon rate of 5.2 percent one vear ago for $920. The bond sells for $970 today. a. Assuming a $1,000 face value, what was your total dollar return on this investment over the past year? o. 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.) :. If the inflation rate last year was 1.5 percent, what was your total real rate of return on this investment? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. Total dollar return b. Nominal rate of return % c. Real rate of return %
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
100%
11-12
Transcribed Image Text:Suppose you bought a bond with an annual coupon rate of 5.2 percent one
year ago for $920. The bond sells for $970 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 1.5 percent, what was your total real rate of
return on this investment? (Do not round intermediate calculations. Enter
your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
a.
Total dollar return
b.
Nominal rate of return
%
C.
Real rate of return
%
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education