2. A bond's nominal interest rate is 8.80%. If the expected inflation rate is 2.10% and the realized (actual) inflation rate is 2.55%. What is the bond's real rate of return?
A. 8.35%
B. 3.70%
C. 6.25%
D. 5.80%
Bond's real rate of return = Bond's nominal rate of return - Actual inflation rate = 8.80% - 2.55% | 6.25% | Option C |
2. A bond's nominal interest rate is 8.80%. If the expected inflation rate is 2.10% and...
1. A stock with a beta of 1.32 is expected to return 14.57% next year. If the expected market return is 11.50%, what is the expected risk free rate? A. 1.90% B. 3.07% C. .61% D. 8.71% 2. A bond's nominal interest rate is 8.80%. If the expected inflation rate is 2.10% and the realized (actual) inflation rate is 2.55%. What is the bond's real rate of return? A. 8.35% B. 3.70% C. 6.25% D. 5.80%
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