P12-4 Calculating Returns (L01] Suppose you bought a 6 percent coupon bond one year ago for $1,000. The bond sells for $1,065 today.
Requirement 1: Assuming a $1,000 face value, what was your total dollar return on this investment over the past year? (Click to select)
Requirement 2: What was your total rate of return on this investment over the past year (in percent)? (Click to select)
Requirement 3: If the inflation rate last year was 7 percent, what was your total “real” rate of return on this investment? Assume that the answer for “Requirement 2” above is in “nominal terms, and then use the Fisher Effect Formula (see Bond chapter) to find the “real” rate of return. (Do not round intermediate calculations.) (Click to select) Get Finance homework help