A bond pays $11,000 per year for the next 10 years. The bond costs $99,000 now. Inflation is expected to be 6 percent over the next 10 years. Answer parts (a) and (b). a. What is the current dollar internal rate of return? Use linear interpolation with x₁ = 1.95% and x₂ = 2.00% to find your answer. The current dollar internal rate of return is percent. (Type an integer or decimal rounded to two decimal places as needed.)
A bond pays $11,000 per year for the next 10 years. The bond costs $99,000 now. Inflation is expected to be 6 percent over the next 10 years. Answer parts (a) and (b). a. What is the current dollar internal rate of return? Use linear interpolation with x₁ = 1.95% and x₂ = 2.00% to find your answer. The current dollar internal rate of return is percent. (Type an integer or decimal rounded to two decimal places as needed.)
Chapter8: Analysis Of Risk And Return
Section: Chapter Questions
Problem 10P
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