Return on investment

avinash (student) (36 Points)

09 March 2013  
  1. You bought one of Rocky Mountain Manufacturing Co.’s 8 percent coupon bonds one year ago for $1,028.50.  These bonds make annual payments and mature nine 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 4.8 percent over the past year, what would be your total real return on investment?