EPS Group has bonds outstanding with a 7.61 percent nominal yield to maturity. The current rate of inflation is 4.2 percent. What is the real rate of return on these bonds?

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter8: Analysis Of Risk And Return
Section: Chapter Questions
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EPS Group has bonds outstanding with a 7.61 percent nominal yield to maturity. The current rate of inflation is 4.2 percent. What is the real rate of return on these bonds?

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