Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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You bought one of Elkins Manufacturing Co.'s 6.8 percent coupon bonds one year ago
for $1,054. These bonds make annual payments, mature 15 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 and enter your answer as a percent rounded to 2 decimal places, e.g.,
32.16.)
Total real return
%
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Transcribed Image Text:You bought one of Elkins Manufacturing Co.'s 6.8 percent coupon bonds one year ago for $1,054. These bonds make annual payments, mature 15 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 and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Total real return %
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