Solution-What is total nominal rate of return

What is total nominal rate of return

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Reference no: EM132348751

Calculating Returns

Suppose you bought a bond with an annual coupon of 7 percent one year ago for $970. The bond sells for $940 today.

A.) Assume a $1,000 face value, 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? Please explain each step.

Reference no: EM132348751

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What is total nominal rate of return

Reference no: EM132348751

Reference no: EM132348751

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