What would be your total real return on investment

Assignment Help Financial Management

Reference no: EM132022962

You bought one of Rocky Mountain Manufacturing Co.’s 9 percent coupon bonds one year ago for $1,049.80. These bonds make annual payments and mature seven years from now. Suppose that you decide to sell your bonds today, when the required return on the bonds is 8.5 percent.

If the inflation rate was 4.4 percent over the past year, what would be your total real return on investment? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Total real return on investment %

Reference no: EM132022962

Questions Cloud

Bond price-what price would be predicted by duration rule : Find the exact price of the bond if it's yield to maturity rises to 9%. What price would be predicted by the duration rule?

Example of vertical and horizontal integration : What could be an example of vertical and horizontal integration? What are the advantages and disadvantages to these two types of integration?

What is it expecting the cost to be : Omega Instruments has budgeted $300,000 per year to pay for certain ceramic parts over the next 5 years. If the company expects the cost of the parts.

Disadvantages associated with communicating by email : What are some advantages and disadvantages associated with communicating by email?

What would be your total real return on investment : If the inflation rate was 4.4 percent over the past year, what would be your total real return on investment?

Explain the tax consequences of the lightning strike : Omar, a single person, purchased a home in July of 2004 for $400,000. He has lived in the home as his primary residence since he purchased the house.

What will be approximate capital gain of this bond : What will be the approximate capital gain of this bond over the next year if its yield to maturity remains unchanged?

Total variable cost and variable cost per unit of activity : Whats an example of an impact of an increase of the level of activity on total variable cost and variable cost per unit of activity.

What is the future value of the given cash flow pattern : You have been offered the opportunity to invest in a business endeavor that will pay $5429 per year at the end of years one through three and $5805 per year.

User Account

All Pages