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

question 25

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% coupon,and was sold for $960 when the inflation rate was 6%?

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

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Definitions:

Reaction

An operation where materials react, resulting in the creation of new materials with different chemical and physical attributes.

Reaction

A process in chemistry in which one or more substances, the reactants, undergo a transformation to form new substances, the products.

Reaction

A process where one or more substances are converted into different substances through the breaking and forming of chemical bonds.

Reaction Product

The materials that result from chemical reactions.