Marie bought a five-year 4.25% annual coupon bond for $974 one year ago.Today, she sold the bond at the market yield rate of 4%.What is Marie's approximate real rate of return if the inflation rate over the past year was 2.2%?
A) 1.80%
B) 2.05%
C) 5.76%
D) 5.98%
Correct Answer:
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