Compute the annual rate on the real bond

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Reference no: EM132013379

Consider these long-term investment data:

  • The price of a 10-year $100 par zero coupon inflation-indexed bond is $88.70. A real-estate property is expected to yield 2% per quarter (nominal) with a SD of the (effective) quarterly rate of 10%.

a. Compute the annual rate on the real bond.

Reference no: EM132013379

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