You bought one of Great White Shark Repellant Co.’s 7 percent coupon bonds one y

Q: You bought one of Great White Shark Repellant Co.’s 7 percent coupon bonds one y

ANSWER: 15.77 ± 46.785 = (-31.015, 62.555). Since the range includes 0, there does not appear to be a significant difference between the means of the two groups.

ID: 2712123 • Letter: Y

Question

You bought one of Great White Shark Repellant Co.’s 7 percent coupon bonds one year ago for $1,045. These bonds make annual payments and mature 12 years from now. Suppose you decide to sell your bonds today, when the required return on the bonds is 6 percent. If the inflation rate was 3.2 percent over the past year, what was your total real return on investment? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Total real return____________ % (ANSWER IS NOT 7.22%)

Explanation / Answer

ANSWER:

15.77 ± 46.785 = (-31.015, 62.555). Since the range includes 0, there does not appear to be a significant difference between the means of the two groups.

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You bought one of Great White Shark Repellant Co.’s 8 percent coupon bonds one y

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You bought one of Great White Shark Repellant Co.’s 7 percent coupon bonds one y

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