CORP FIN (LL)+CONNECT+PROCTORIO+180
CORP FIN (LL)+CONNECT+PROCTORIO+180
12th Edition
ISBN: 9781266120343
Author: Ross
Publisher: MCG
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Chapter 10, Problem 6QAP
Summary Introduction

Adequate information:

The annual return on a long-term corporate bond is 6.4% and the long-term government bond is 6.0% from 1926 to 2017.

The average inflation rate is 3.0%.

To calculate: The historical real rate of return on long-term government bonds and corporate bonds.

Introduction: Nominal rate of return refers to the rate of return that is earned by the investors before making any adjustments with respect to inflation. The real rate of return is the rate of return that is adjusted with the given inflation rate.

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Chapter 10 Solutions

CORP FIN (LL)+CONNECT+PROCTORIO+180

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