Effective annual return of the bond

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a) A bond issued by ENBRIDGE INC on September 2, 1999 was purchased on March 8, 2022 at index 103. This bond has a coupon rate of 5.75% per year capitalized semi-annually, whose coupons are due on September 2 and March 2. The maturity date is September 2, 2039 and the cash value is at par. Calculate the current yield, yield to maturity and effective annual return of the bond? Please submit all your calculations

b) For this same bond in (a), if the current inflation rate is 4.5%, calculate the approximate real rate of return and then the exact real rate? Please submit all your calculations

Reference no: EM133118478

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