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7. Suppose that the coupon rate for 10-year maturity TIPS is 1%. Suppose further that an investor purchases $1,000,000 of par value (initial principal) of

7. Suppose that the coupon rate for 10-year maturity TIPS is 1%. Suppose further that an investor purchases $1,000,000 of par value (initial principal) of this issue today and that the annual inflation rate is 2%. What is the coupon payment on the third coupon payment date? Coupons are paid semi-annually. We assume the same inflation rate.

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