A Bond Has a Yield to Maturity of 8

question 65

Multiple Choice

A bond has a yield to maturity of 8.97 percent. If the inflation rate is 1.2 percent, what is the real rate of return on the bond?

• A) 8.97 percent
• B) 7.90 percent
• C) 7.57 percent
• D) 7.68 percent
• E) 7.95 percent

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Definitions:

Hemisphere

Half of the earth, usually divided into northern and southern halves by the equator, or into western and eastern halves by an imaginary line passing through the poles.

Majority

A term referring to the greater part or number; in a group, the majority is more than half of its members.

Minority

A subgroup within a population that differs from the majority in cultural, ethnic, racial, social, or political characteristics.

Genome

All the genes or genetic content located in an organism or one of its cells.