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

question 127

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 Nominal return =

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