A bond yielded a real rate of return of 4.79 percent for a time period when the

Question

A bond yielded a real rate of return of 4.79 percent for a time period when the inflation rate was 1.96 percent. What is the nominal rate of return?
A) 7.57 percent B) 7.08 percent C) 6.55 percent D) 6.84 percent E) 6.75 percent A bond yielded a real rate of return of 4.79 percent for a time period when the inflation rate was 1.96 percent. What is the nominal rate of return?
A) 7.57 percent B) 7.08 percent C) 6.55 percent D) 6.84 percent E) 6.75 percent
A) 7.57 percent B) 7.08 percent C) 6.55 percent D) 6.84 percent E) 6.75 percent

Explanation / Answer

Ans Real rate = Nominal return -Inflation =

Nominal = 4.79+ 1.96%= 6.75% . Ans is E

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