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A portfolio manager invested $1,500,000 in bonds in 2007. In one year the market value of...


A portfolio manager invested $1,500,000 in bonds in 2007. In one year the market value of the bonds dropped to $1,485,000. The interest payments during the year totaled $105,000.
a. What was the manager’s total rate of return for the year?
The total rate of return is
b. What was the manager’s real rate of return if the inflation rate during the year was 2.3%?
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