ZuoTi.Pro
Question

You bought one of Mastadon Manufacturing Co.’s 6.8 percent coupon bonds one year ago for $1,054....

You bought one of Mastadon Manufacturing Co.’s 6.8 percent coupon bonds one year ago for $1,054. These bonds make annual payments, mature fifteen years from now, and have a par value of $1,000. Suppose you decide to sell your bonds today, when the required return on the bonds is 5 percent.
  
If the inflation rate was 3.6 percent over the past year, what would be your total real return on the investment? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
  
Total real return         __   %

FYI: 15.45 % IS NOT THE ANSWER

business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

Home nert Page Layout Formulas Data Review View dd-Ins s Cut aCopy Σ AutoSum ー E ゴWrap Text в 1 프 . Ej-., Δ. : rーー 逻锂函Merge & Center. $, % , 弼,8 Conditional Format eCell Insert Delete Format Sort &Find & Format Painter Formatting as Table Styles2 Clear Clipboard Alignment Number Cells Edting F957 purchase price par value coupon years YTM price today 941 942 943 944 945 946 947 948 949 950 951 952 953 954 955 956 957 958 959 (4 く トト1 | . AFN , BANKING 1054 1000 6.80% 15 5% 1186.83 PV(C945,C944,-C943 C942,-C942) purchase price sale price annual coupon 1054 PO 1186.83 P1 68 C total dollar return sale price annual coupon - purchase price total dollar return 200.83 C950+C951-C949 nominal rate of return 19.05% (P14C-PO)/PO real rate of return- 14.92% (1 + nominal rate)/(1+inflation rate)-1 NOTE , BIDDING, UNDERWRITING / EUAC AW PM LIFE . LP, lP, MRP, INFLATION YIELD WARRANTrefund bond CLEAN INVOICE PRICE | Sheet1 , Sheet3 07:51

1 0
Add a comment
Know the answer?
Add Answer to:
You bought one of Mastadon Manufacturing Co.’s 6.8 percent coupon bonds one year ago for $1,054....
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • You bought one of Mastadon Manufacturing Co.’s 6.8 percent coupon bonds one year ago for $1,054....

    You bought one of Mastadon Manufacturing Co.’s 6.8 percent coupon bonds one year ago for $1,054. These bonds make annual payments, mature fifteen years from now, and have a par value of $1,000. Suppose you decide to sell your bonds today, when the required return on the bonds is 5 percent.    If the inflation rate was 3.6 percent over the past year, what would be your total real return on the investment? (Do not round intermediate calculations. Enter your...

  • You bought one of Mastadon Manufacturing Co.’s 5.6 percent coupon bonds one year ago for $1,051....

    You bought one of Mastadon Manufacturing Co.’s 5.6 percent coupon bonds one year ago for $1,051. These bonds make annual payments, mature ten years from now, and have a par value of $1,000. Suppose you decide to sell your bonds today, when the required return on the bonds is 4.5 percent. If the inflation rate was 4.2 percent over the past year, what would be your total real return on the investment? (Do not round intermediate calculations. Enter your answer...

  • You bought one of Mastadon Manufacturing Co.’s 6 percent coupon bonds one year ago for $1,040....

    You bought one of Mastadon Manufacturing Co.’s 6 percent coupon bonds one year ago for $1,040. These bonds make annual payments, mature eleven years from now, and have a par value of $1,000. Suppose you decide to sell your bonds today, when the required return on the bonds is 5 percent.    If the inflation rate was 2.0 percent over the past year, what would be your total real return on the investment? (Do not round intermediate calculations. Enter your...

  • You bought one of Mastadon Manufacturing Co.’s 8 percent coupon bonds one year ago for $1,059....

    You bought one of Mastadon Manufacturing Co.’s 8 percent coupon bonds one year ago for $1,059. These bonds make annual payments, mature ten years from now, and have a par value of $1,000. Suppose you decide to sell your bonds today, when the required return on the bonds is 7 percent. If the inflation rate was 4.8 percent over the past year, what would be your total real return on the investment? (Do not round intermediate calculations. Enter your answer...

  • You bought one of Mastadon Manufacturing Co.’s 6.6 percent coupon bonds one year ago for $1,056....

    You bought one of Mastadon Manufacturing Co.’s 6.6 percent coupon bonds one year ago for $1,056. These bonds make annual payments, mature eleven years from now, and have a par value of $1,000. Suppose you decide to sell your bonds today, when the required return on the bonds is 4.5 percent. If the inflation rate was 3.2 percent over the past year, what would be your total real return on the investment? (Do not round intermediate calculations. Enter your answer...

  • You bought one of Great White Shark Repellant Co.’s 10 percent coupon bonds one year ago...

    You bought one of Great White Shark Repellant Co.’s 10 percent coupon bonds one year ago for $780. These bonds make annual payments and mature 6 years from now. Suppose you decide to sell your bonds today, when the required return on the bonds is 14 percent. If the inflation rate was 3.6 percent over the past year, what was your total real return on investment?

  • You bought one of Manufacturing Co.'s 5.4 percent coupon bonds one year ago for $1,030. These...

    You bought one of Manufacturing Co.'s 5.4 percent coupon bonds one year ago for $1,030. These bonds make annual payments and mature six years from now. Suppose you decide to sell your bonds today when the required return on the bonds is 5.1 percent. If the inflation rate was 2.3 percent over the past year, what would be your total real return on the investment? Shows all the steps and formula. Don't round off until you get the answer.

  • 7 You bought one of Great White Shark Repellant Co.'s 5.8 percent coupon bonds one year...

    7 You bought one of Great White Shark Repellant Co.'s 5.8 percent coupon bonds one year ago for $1,030. These bonds make annual payments and mature 14 years from now. Suppose you decide to sell your bonds today, when the required return on the bonds is 5.1 percent. 10 points If the inflation rate was 3.9 percent over the past year, what was your total real return on investment? (Do not round intermediate calculations and enter your answer as a...

  • how to solve this problem? You bought one of Rocky Mountain Manufacturing Co.'s 9 percent coupon...

    how to solve this problem? You bought one of Rocky Mountain Manufacturing Co.'s 9 percent coupon bonds one year ago for $1,054.80. These bonds make annual payments and mature seven years from now. Suppose that you decide to sell your bonds today, when the required return on the bonds is 8.5 percent. If the inflation rate was 4.4 percent over the past year, what would be your total real return on the investment? (Do not round intermediate calculations and enter...

  • You bought one of Great White Shark Repellant Co.'s 9 percent coupon bonds one year ago...

    You bought one of Great White Shark Repellant Co.'s 9 percent coupon bonds one year ago for $780. These bonds make annual payments and mature 9 years from now. Suppose you decide to sell your bonds today, when the required return on the bonds is 13 percent. If the inflation rate was 3.7 percent over the past year, what was your total real return on investment?

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT