3. Consider a 10-year inflation-indexed bond purchased at its face, or principal, value of $1000. Assume that the annual coupon rate on the indexed bond is 3.5% percent, and that actual inflation over the 10-year horizon turns out to be a steady 2.3 percent, equal to expected inflation. a. What is the face value used to calculate the coupon at the end of the SECOND year? b. What is the coupon payment at the end of the THIRD year