You bought one of Colton Manufacturing Companys 5.2 percent coupon bonds one year ago for $1,055. These bonds make annual payments and mature fourteen years from now. Suppose you decide to sell your bonds today when the required return on the bonds is 4 percent. The par value is $1,000. If the inflation rate was 3.4 percent over the past year, what would be your total reall return on the investment? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Total real return %
You bought one of Colton Manufacturing Companys 5.2 percent coupon bonds one year ago for $1,055. These bonds make annual payments and mature fourteen years from now. Suppose you decide to sell your bonds today when the required return on the bonds is 4 percent. The par value is $1,000. If the inflation rate was 3.4 percent over the past year, what would be your total reall return on the investment? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Total real return %
Chapter6: Bonds (debt) - Characteristics And Valuation
Section: Chapter Questions
Problem 17PROB
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