What Real Rate of Return Is Earned by a One-Year

question 39

Multiple Choice

What real rate of return is earned by a one-year investor in a bond that was purchased for $1,000, has an 8 percent coupon, and was sold for $960 when the inflation rate was 6 percent?

• A)-1.89 percent
• B)1.92 percent
• C)5.66 percent
• D)11.47 percent

---

Definitions:

Unrelated

Not connected or associated, often used to describe variables that do not influence each other.

Majority

More than half of a total number or quantity; often used in the context of votes, opinions, or demographics.

Independent

A term in statistics and research denoting a variable that is manipulated or controlled in an experiment to observe its effect on the dependent variable.

Weekly Income

The total amount of money earned or received by an individual or entity in one week.