1. Last year, you earned a rate of return of 8.37 percent on your bond investments. During that time, the inflation rate was 3.78 percent. What was your real rate of return? Use the exact relationship between real and nominal rates. Enter answer in percents, accurate to two decimal places.
2. The Boston Clothing Co. has $1,000 face value bond outstanding with a market price of $959. The bond pays interest annually, matures in 10 years, and has a yield to maturity of 7.5 percent. What is the coupon rate? (Enter rate in percents, accurate to two decimal places.)