Market Interest Rates Have Risen Substantially in the 5 Years

question 64

Multiple Choice

Market interest rates have risen substantially in the 5 years since an investor purchased Treasury bonds that were offering a 7% return.If the investor sells now he or she is likely to receive:

• A) greater than a 7% total return.
• B) less than a 7% total return.
• C) a 7% total rate of return.
• D) a 7% nominal return but less than a 7% real return.