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1.Calculate the present value of a $1,000,000 payment, to be received in ten years, assuming the interest rate is 2% 2.Suppose that the interest rate

1.Calculate the present value of a $1,000,000 payment, to be received in ten years, assuming the interest rate is 2%

2.Suppose that the interest rate of TIPS bonds is constant while the interest rate on U.S. Treasury bonds increases. What has happened to the following (increase, decrease or no change) i. Nominal interest rate ii. Real interest rate iii. Expected inflation

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