Problem:
You bought one of Great White Shark Repellant Co.'s 6.4 percent coupon bonds one year ago for $1,058. These bonds make annual payments and mature 13 years from now. Suppose you decide to sell your bonds today, when the required return on the bonds is 6 percent.
Requirement:
Question 1: If the inflation rate was 2.8 percent over the past year, what was your total real return on investment?
Note: Provide support for your rationale.