A $1,000 par value bond carries a coupon rate of 6.5 percent and has a yield to maturity of 7.29 percent.The inflation rate is 3.13 percent.What is the bond's real rate of return?
A) 3.27 percent
B) 4.03 percent
C) 3.37 percent
D) 4.42 percent
E) 3.86 percent
Correct Answer:
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