Nominal rate of return on this investment over past year

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Reference no: EM131346148

Calculating Returns

Suppose you bought a bond with a coupon rate of 8.1 percent one year ago for $904. The bond sells for $940 today.

Required:

(a) Assuming a $1,000 face value, what was your total dollar return on this investment over the past year?

Total dollar return $

(b) What was your total nominal rate of return on this investment over the past year? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)

Total nominal rate of return %

(c) If the inflation rate last year was 4.1 percent, what was your total real rate of return on this investment? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)

Total real rate of return %

Reference no: EM131346148

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