Question: Suppose you bought a 6 percent coupon bond one yea…
Suppose you bought a 6 percent coupon bond one year ago for $950. The bond sells for $995 today.
Requirement 1: Assuming a $1,000 face value, what was your total dollar return on this investment over the past year?
Requirement 2: What was your total nominal rate of return on this investment over the past year?
Requirement 3: If the inflation rate last year was 5 percent, what was your total real rate of return on this investment? (Do not round intermediate calculations.)
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