A Bond That Pays Interest Annually Yields a 6

question 298

Multiple Choice

A bond that pays interest annually yields a 6.875% rate of return. The inflation rate for the same period is 4.35%. What is the real rate of return on this bond?

• A) 2.38%
• B) 2.42%
• C) 2.53%
• D) 2.61%
• E) 2.64%

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