You bought one of Great White Shark Repellant Co.s 6 percent coupon bonds one ye

Question

You bought one of Great White Shark Repellant Co.s 6 percent coupon bonds one year ago for $1,040. 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 5 percent. If the inflation rate was 2.0 percent over the past year, what was your total real return on investment? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) Total real return % check my workreferencesebook & resources

Explanation / Answer

Real Rate of Return= Discounted Coupon Rate-Inflation=6/(1.05)-2=3.71%

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