Question
1) You buy a TIPS at issue at par for $1,000. The bond has a 4.92% annual pay coupon. Inflation turns out to be 3.3%,
1) You buy a TIPS at issue at par for $1,000. The bond has a 4.92% annual pay coupon. Inflation turns out to be 3.3%, 3.71%, and 3.06% over the next 3 years. What is the total annual coupon income you will receive in year 3?
2). A coupon bond that pays semiannual interest is reported in the Wall Street Journal as having an ask price of 85% of its $1,000 par value. If the last interest payment was made 97 days ago, and this interest period has 183 days, and the coupon rate is 4.42%, what is the invoice price of the bond?
3). 3 years ago you purchased a 11 year maturity, 4.9% coupon annual pay bond at a price of $98 per $100 of face value. Shortly after you purchased the bond, yields changed to 3.69%. If you sell the bond today at a price of $96 per $100 of face value, what is your annualized holding period return?
Enter answer in percents, to two decimal places.
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