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You bought one of Great White Shark Repellant Company's 8.2 percent coupon bonds one year ago for $1,050. These bonds make annual payments and mature 13 years from now. Suppose you decide to sell your bonds today, when the required return on the bonds is 7 percent. The bonds have a par value of $1,000. If the inflation rate was 2.2 percent over the past year, what was your total real return on investment? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

You bought one of Great White Shark Repellant Company's 8.2 percent coupon bonds one year ago for $1,050. These bonds make annual payments and mature 13 years from now. Suppose you decide to sell your bonds today, when the required return on the bonds is 7 percent. The bonds have a par value of $1,000. If the inflation rate was 2.2 percent over the past year, what was your total real return on investment? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter6: Fixed-income Securities: Characteristics And Valuation
Section: Chapter Questions
Problem 15P
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You bought one of Great White Shark Repellant Company's 8.2 percent coupon bonds one year ago for $1,050. These bonds make annual payments and mature 13 years from now. Suppose you decide to sell your bonds today, when the required return on the bonds is 7 percent. The bonds have a par value of $1,000. If the inflation rate was 2.2 percent over the past year, what was your total real return on investment? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Transcribed Image Text:You bought one of Great White Shark Repellant Company's 8.2 percent coupon bonds one year ago for $1,050. These bonds make annual payments and mature 13 years from now. Suppose you decide to sell your bonds today, when the required return on the bonds is 7 percent. The bonds have a par value of $1,000. If the inflation rate was 2.2 percent over the past year, what was your total real return on investment? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
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