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17 September, 15:39

A bond par value is $1,000 and the coupon rate is 6.5 percent. The bond price was $947.00 at the beginning of the year and $985.39 at the end of the year. The inflation rate for the year was 2.2 percent. What was the bond's real return for the year?

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  1. 17 September, 16:23
    0
    10.92%

    Explanation:

    Bond return = ($985.39 - 947.00 + 65) / $947.00

    Bond return =.1092, or 10.92%
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Home » Business » A bond par value is $1,000 and the coupon rate is 6.5 percent. The bond price was $947.00 at the beginning of the year and $985.39 at the end of the year. The inflation rate for the year was 2.2 percent. What was the bond's real return for the year?
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