You are considering purchasing a corporate bond, which matures on December 31, 2015 (5-year bond) at a
market price of $1030. It has a par value of $1,000, a 7% coupon rate, and interests will be paid annually.
Suppose you will hold the bond until its maturity. If you expect a 4% general inflation rate annually during this
holding period, what would be your real (true) yield to maturity (rate of return)?

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The Answer of You are considering purchasing a corporate bond, which matures on December 31, 2015 (5-year bond) at a
market price of $1030. It has a par value of $1,000, a 7% coupon rate, and interests will be paid annually.
Suppose you will hold the bond until its maturity. If you expect a 4% general inflation rate annually during this
holding period, what would be your real (true) yield to maturity (rate of return)?

You Are Considering Purchasing a Corporate Bond, Which Matures on December