A Bond That Pays Interest Annually Yields a Rate of Return

question 47

Multiple Choice

A bond that pays interest annually yields a rate of return of 7.25 percent.The inflation rate for the same period is 2.31 percent.What is the actual real rate of return on this bond?

• A)4.79%
• B)4.87%
• C)4.83%
• D)4.94%
• E)4.91%

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Definitions:

Reabsorption

The process by which the kidneys filter the blood, reabsorbing what the body needs and excreting the rest.

Serotonin

A neurotransmitter involved in the regulation of mood, appetite, and sleep, and implicated in depression when levels are insufficient.

Tardive Dyskinesia

A neurological disorder characterized by involuntary, repetitive body movements, often resulting from long-term use of antipsychotic medication.

Dopamine Receptor Sites

Specific locations on nerve cells in the brain that interact with dopamine to transmit signals related to pleasure, reward, and motor function.