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:

Separate Corporate Boundaries

A principle that maintains the legal independence between a corporation and its shareholders, protecting personal assets from business liabilities.

Piercing The Corporate Veil

Holding a shareholder responsible for acts of a corporation due to a shareholder’s domination and improper use of the corporation.

Promote Justice

The act of advocating for fair treatment and equal rights within legal, societal, or institutional contexts.

Shareholders

Individuals or entities that own shares in a corporation, making them partial owners and entitling them to potential dividends and certain rights within the corporation.