Answer:
the real rate of interest of 6.39 %
Explanation:
given,
rate of return on your bond = 11.29 %
the inflation rate = 4.6 %
real rate of return = ?
rate of return = [tex](\dfrac{1+ return\ rate}{1 + inflation }-1)\times 100[/tex]
rate of return = [tex](\dfrac{1+ 0.1129 }{1 + 0.046 }-1)\times 100[/tex]
rate of return = [tex](\dfrac{1+ 0.1129 }{1 + 0.046 }-1)\times 100[/tex]
rate of return = [tex](\dfrac{1.1129}{1.046 }-1)\times 100[/tex]
= 6.39 %
the real rate of interest of 6.39 %
