What would be your total real return on investment

Assignment Help Financial Management

Reference no: EM13917323

You bought one of Rocky Mountain Manufacturing Co.’s 9 percent coupon bonds one year ago for $1,047.30. These bonds make annual payments and mature seven years from now. Suppose that you decide to sell your bonds today, when the required return on the bonds is 8.50 percent.

Required:

If the inflation rate was 3.9 percent over the past year, what would be your total real return on investment?

Reference no: EM13917323

Questions Cloud

Expected return on portfolio-expected returns on stocks : You own a portfolio that has $3,100 invested in Stock A and $4,200 invested in Stock B. Assume the expected returns on these stocks are 11 percent and 17 percent, respectively. What is the expected return on the portfolio?

What must expected return on this stock : A stock has a beta of 1.24, the expected return on the market is 11.8 percent, and the risk-free rate is 4.55 percent. What must the expected return on this stock be?

What was your dollar return on this investment : You purchased 270 shares of a particular stock at the beginning of the year at a price of $75.33. The stock paid a dividend of $.95 per share, and the stock price at the end of the year was $81.84. What was your dollar return on this investment?

Using two-step binomial model : Value of a stock is currently at $40. Volatility of that stock is 30% per year and risk- free interest rate with continuous compounding is at 2.5% per year. Find the value of a 6-month call and a 6-month put option using a two-step binomial model. Bo..

What would be your total real return on investment : You bought one of Rocky Mountain Manufacturing Co.’s 9 percent coupon bonds one year ago for $1,047.30. These bonds make annual payments and mature seven years from now. Suppose that you decide to sell your bonds today, when the required return on th..

Planning to save for retirement-return of the stock account : You are planning to save for retirement over the next 35 years. To do this, you will invest $740 a month in a stock account and $340 a month in a bond account. The return of the stock account is expected to be 9.4 percent, and the bond account will p..

Club membership costing : Eddy purchased a club membership costing $2,530. He made a down payment of $530 and financed the balance with an installment loan for 48 months. If the payments are $59.27 each month, use Table 13-1 from your text to find the APR.

Find the finance charge-calculate the monthly payment : A finance company offers a 24-month installment loan with an APR of 13.5%. Robert wishes to use the loan to finance a delivery truck for $31,200. After using Table 13-1 from your text to find the finance charge, calculate the monthly payment.

MARKET CONTAGION-OMEGA Study of Investment Analysis : MARKET CONTAGION It is said that global stock markets are intertwined/connected and that market performance in one part of the world could have fundamental impacts or influences on the markets in other parts of the world (contagion). OMEGA Study of ..

User Account

All Pages