Tri-County Hauling Has Bonds Outstanding That Pay a 6% Coupon

question 258

Multiple Choice

Tri-County Hauling has bonds outstanding that pay a 6% coupon, have a 5.47% yield to maturity, and a face value of $1,000. The current rate of inflation is 3.2%. What is the real rate of return on these bonds?

• A) 0.53%
• B) 2.20%
• C) 2.27%
• D) 2.71%
• E) 2.80%

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