Suppose that you buy a tips inflation-indexed bond with a, Ask an Expert

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Suppose that you buy a TIPS (inflation-indexed) bond with a 1-year maturity and a coupon of 4% paid annually. Assume you buy the bond at its face value of $1,000, and the inflation rate is 8%

What will be your cash flow at the end of the year? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

What will be your real return? (Enter your answer as a whole percent.

What will be your nominal return? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91773059

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