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

question 96

Multiple Choice

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

• A) -1.89%
• B) 1.92%
• C) -2.66%
• D)2.47%

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