You invest in a 10-year Peloton bond that pays interest of 8.7% per year. If inflation is 6.1% per year, what is: The exact, real interest rate (Your answer should be a % carried to 3 places), and The approximate real interest rate? (Your answer should be a % carried to 1 place)

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter8: Analysis Of Risk And Return
Section: Chapter Questions
Problem 9P
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You invest in a 10-year Peloton bond that pays interest of 8.7% per year. If inflation is 6.1% per year, what is:

    1. The exact, real interest rate (Your answer should be a % carried to 3 places), and
    2. The approximate real interest rate? (Your answer should be a % carried to 1 place)
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