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9 Problem 14-18 The following table showing the cash flows for TIPS bonds. 0 points Inflation in Year Just Ended Coupon Payment Principal Repayment Time

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9 Problem 14-18 The following table showing the cash flows for TIPS bonds. 0 points Inflation in Year Just Ended Coupon Payment Principal Repayment Time Total Payment eBook 1 2 3 Print Par Value $1,000.00 1,030.00 1,060.90 1,082.12 3.00% 3.00 2.00 $61.80 63.65 64.93 $ 0 1,082.12 $ 61.80 63.65 1,147.05 a. What is the nominal rate of return on the bond in year 2? If real rate of return is 6.00% per annum (Round your answer to 2 decimal places.) Nominal rate of return in year 2 % b. What is the real rate of return in year 2? (Round your answer to 2 decimal places.) Real rate of return in year 2 %

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