- You bought one of Rocky Mountain Manufacturing Co.’s 8 percent coupon bonds one year ago for $1,028.50. These bonds make annual payments and mature nine years from now. Suppose you decide to sell your bonds today, when the required return on the bonds is 7 percent. If the inflation rate was 4.8 percent over the past year, what would be your total real return on investment?
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Return on investment
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the total return on the investment would still be 7 % . However the real rate of return would be 2.2 %...
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