If a bond compounding annually has a nominal yield of 6% and the inflation rate is 4%,then the real interest rate is really only 2%.
The stated interest rate is the interest rate listed on a bond's coupon.This is the actual amount of interest paid by the issuer of the bond.Therefore,if the issuer pays $60 for a bond with a face value of $1,000, then the stated interest rate is 6%. APR is the annual cost of a loan to a borrower,including fees.Like an interest rate,the APR is expressed as a percentage.Unlike an interest rate,however,it includes other charges or fees like mortgage insurance,most closing costs,discount points,and loan origination fees. The US Department of the Treasury announced Tuesday that Series I savings bonds,also known,pay an annual interest rate of 6.89% through April 2023,below the 9.62% paid by those who bought between May and end of October.
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