Suppose you bought a 12 percent coupon bond one year ago for $990. The bond sells for $1, 035 today.
Requirement 1: Assuming a $1,000 face value, what was your total dollar return on this investment over the past year?
Requirement 2: What was your total nominal rate of return on this investment over the past year?
Requirement 3: If the inflation rate last year was 6 percent, what was your total real rate of return on this investment? (Do not round intermediate calculations.)