If the inflation rate was 40 percent over the past year


You bought one of Great White Shark Repellant Co.'s 7.4 percent coupon bonds one year ago for $1,041. These bonds make annual payments and mature 20 years from now. Suppose you decide to sell your bonds today, when the required return on the bonds is 6 percent.

If the inflation rate was 4.0 percent over the past year, what was your total real return on investment?

 

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Finance Basics: If the inflation rate was 40 percent over the past year
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