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6. (6 points) You plan to buy a TIPS (inflation indexed) bond with a two-year maturity and a real coupon rate of 5%. It makes
6. (6 points) You plan to buy a TIPS (inflation indexed) bond with a two-year maturity and a real coupon rate of 5%. It makes coupon payments annually. You buy the bond at its face value of $1,000. The annual inflation rate is Y%. a. Determine your real cash flows over the life of this bond. b. How much do you expect to get over the life of this bond? In other words, determine your nominal cash flows over the life of this bond
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