Problem on investment returns


You bought one of Great White Shark Repellant Co.'s 8 percent coupon bonds one year ago for $1,030. These bonds make annual payments and mature six years from now. Suppose you decide to sell your bonds today, when the required return on the bonds is 7 percent. If the inflation rate was 4.2 percent over the past year, your total real return on this investment was ____percent.

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Finance Basics: Problem on investment returns
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