Over the past year (from one year ago to today), the inflation rate was 2.62% the risk-free rate was 4.88% and the real rate of return for a bond was 9.21%. The bond is currently priced at $961.00 pays annual coupons of $112.00 and just made a coupon payment. What was the price of the bond one year ago? $982.51 (plus or minus $1.00) $957.43 (plus or minus $1.00) $998.14 (plus or minus $1.00) $940.49 (plus or minus $1.00) O None of the above is within $1.00 of the correct answer

Q&A Education