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30. Nominal and real returns* Suppose that you buy a two-year 8% bond at its face value. Page 75 a. What will be your total
30. Nominal and real returns* Suppose that you buy a two-year 8% bond at its face value. Page 75 a. What will be your total nominal return over the two years if inflation is 3% in the first year and 5% in the second? What will be your total real return? b. Now suppose that the bond is a TIPS. What will be your total two-year real and nominal returns
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