If Inflation Is 6%,what Real Rate of Return Is Earned

question 13

Multiple Choice

If inflation is 6%,what real rate of return is earned by an investor in a bond that was purchased for $1,000,has an annual coupon of 8%,and was sold at the end of the year for $960?

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