Suppose You Bought A$1,000 Face Value Bond with a 5

Multiple Choice

Suppose you bought a$1,000 face value bond with a 5 percent coupon one year ago for $1,020.The bond sells today for $986.If the inflation rate last year was 2.3 percent, what was your total real rate of return on this investment?

A) .02 percent
B) -.71 percent
C) .31 percent
D) .89 percent
E) -.48 percent