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5) a) What is the price of a 3 year zero-coupon US government real bond with the (real) face value of $1,000 issued on January

5)

a) What is the price of a 3 year zero-coupon US government real bond with the (real) face value of $1,000 issued on January 24, 2011 on its issuance day?

b) Suppose you buy a real bond from part a) on January 24, 2011 and hold it for exactly 1 year until January 24, 2012 and then sold it. How many dollars did you make or lose from this investment?

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