Bought bond with an annual coupon

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Reference no: EM131551012

Suppose you bought a bond with an annual coupon rate of 5.4 percent one year ago for $890. The bond sells for $920 today.

a. Assuming a $1,000 face value and paying an annual interest, 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?

c. If the inflation rate last year was 3 percent, what was your total real rate of return on this investment?

Reference no: EM131551012

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