You Just Bought a Bond with a Yield to Maturity

question 103

Multiple Choice

You just bought a bond with a yield to maturity of 9.5%.If the rate of inflation is expected to be 4%,what is the real return on your investment?

• A) 9.50%
• B) 5.29%
• C) 4.00%
• D) Not enough information.

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Definitions:

James L. Adams

An author known for his work on creativity, particularly in the context of design and engineering.

Creativity

The use of imagination or original ideas to create something; inventiveness.

Uncertain Conditions

Situations where the outcomes or future states are not predictable due to a lack of information or inherent variability in the environment.

Entrepreneurship

The act of creating, developing, and managing a business venture along with its financial risks in order to profit and innovate within the market.