1. If inflation is 6%, what real rate of return is earned by an investor in a bond that was purchased for $1,000, has an annual coupon of 8%, and was sold at the end of the year for $960?
2. Obtaining financing from a venture capital partner is the best thing a small growing company can do. Obtaining financing from a venture capital partner is the worst thing a small growing company can do. Explain how both these statements are true. Describe when a company must strongly consider venture capital and when they should dismiss venture funds as a bad alternative.