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You purchased an 8-year $1,000 face value bond one year ago at par. The bond ha…

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Wize University Introduction to Finance Textbook > Bond Valuation

Real Return

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You purchased an 8-year $1,000 face value bond one year ago at par. The bond has a coupon rate of 10% and today it was sold at a price yielding 10%. Inflation this year was 7%. The coupon rate on the bond is 12% and coupons are paid quarterly.

What is the real rate of return?
%
More Real Return Questions:
You purchased a $1,000 face value bond one year ago for $856.12. The bond has a coupon rate of 12% and today it was sold at par. Inflation this year was 5%.
What is the real rate of return?