You bought one of Great White Shark Repellant Company's 8.4 percent coupon bonds one year ago for $1,048. These bonds make annual payments and mature 11 years from now. Suppose you decide to sell your bonds today, when the required return on the bonds is 7 percent. The bonds have a par value of $1,000. If the inflation rate was 2.6 percent over the past year, what was your total real return on 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 %

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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Chapter1: Investments: Background And Issues
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You bought one of Great White Shark Repellant Company's 8.4 percent coupon bonds
one year ago for $1,048. These bonds make annual payments and mature 11 years from
now. Suppose you decide to sell your bonds today, when the required return on the
bonds is 7 percent. The bonds have a par value of $1,000. If the inflation rate was 2.6
percent over the past year, what was your total real return on 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
%
Transcribed Image Text:You bought one of Great White Shark Repellant Company's 8.4 percent coupon bonds one year ago for $1,048. These bonds make annual payments and mature 11 years from now. Suppose you decide to sell your bonds today, when the required return on the bonds is 7 percent. The bonds have a par value of $1,000. If the inflation rate was 2.6 percent over the past year, what was your total real return on 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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