The tips bond has an annual coupon rate of 45 the table, Ask an Expert

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The TIPS bond has an annual coupon rate of 4.5%. The table below shows the history of inflation rates for the first three years of the bond's life.

Time	Inflation for year just ended	par value
0		$1000
1	3%
2	4%
3	3%

a. What was the nominal return in year 2?

b. What was the real return in year 2?

c. What was the nominal return in year 3?

d. What was the real return in year 3?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92868107

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