Coupon = 9% of 1000 = 90
Current price = Coupon * [1 - 1 / (1 + r)^n] / r + FV / (1 + r)^n
Current price = 90 * [1 - 1 / (1 + 0.13)^9] / 0.13 + 1000 / (1 + 0.13)^9
Current price = 90 * [1 - 0.332885] / 0.13 + 332.884833
Current price = 90 * 5.131655 + 332.884833
Current price = $794.733795
Total return = [(Ending value + coupon - beginning value) / beginning value] * 100
Total return = [(794.733795 + 90 - 780) / 780] * 100
Total return = 13.42741%
Total real return = [(1 + total return) / ( + inflation return)] -
Total real return = [(1 + 0.1342741) / (1 + 0.037)] - 1
Total real return = [1.1342741 / 1.037] - 1
Total real return = 1.0938 - 1
Total real return = 0.0938 or 9.38%
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 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 Great White Shark Repellant Co.'s 9 percent coupon bonds one year ago for $790. 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 12 percent. If the inflation rate was 3.3 percent over the past year, what was your total real return on investment?
You bought one of Great White Shark Repellant Co.'s 9 percent coupon bonds one year ago for $800. These bonds make annual payments and mature 12 years from now. Suppose you decide to sell your bonds today, when the required return on the bonds is 12 percent. If the Inflation rate was 3.5 percent over the past year, what was your total real return on investment? Multiple Choice 16.98% 0 -167% 09.20% 9.66% 9.30%
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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...
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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.
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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...