Hi could someone please help me with this review question? Could you show the answer as well as the steps to get
it. Thank you!
7. A bond is currently selling at 1.15 on its par value of $1,000. This bond has a maturity of 15 years and a coupon rate of 5%, payable semi-annually. If the inflation rate is 3%, what is the real yield on this bond? (4 marks)