What was your real return form holding the bond one year

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Reference no: EM131844333

Suppose that on January 1, 2016, you purchased a bond with the following characteristics

Face value: $1,000

Maturity date: January 1, 2018

Current yield: 7.5%

Price: $850 All underlying work must be shown

e. If inflation rate in January 2017 was 1.7%, what was your real return form holding the bond one year?

g .Suppose that instead selling the bond after one year, you hold the bond until its maturity. What would be your annual return from this bond?

Reference no: EM131844333

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