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3. TIPS calculate the coupon payment TIPS w/ 4% coupon rate. What will coupon payment be in year 2? Year 3? amounts for year 2:

3. TIPS calculate the coupon payment

TIPS w/ 4% coupon rate. What will coupon payment be in year 2? Year 3?

amounts for year 2: 42.02

year 3: 42.44

How did we get these amounts

Inflation in year just ended. Year 1: 2% Year 2: 3% Year 3: 1%

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