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What Real Rate of Return Is Earned by a One-Year

Question 39

Multiple Choice

What real rate of return is earned by a one-year investor in a bond that was purchased for $1,000, has an 8 percent coupon, and was sold for $960 when the inflation rate was 6 percent?


A) -1.89 percent
B) 1.92 percent
C) 5.66 percent
D) 11.47 percent

Correct Answer:

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