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: (a) Calculate the price of a 10-Y bond with 5% annualized coupon that pay annual interest at 5% yield. (b) Now consider a bond
: (a) Calculate the price of a 10-Y bond with 5% annualized coupon that pay annual interest at 5% yield. (b) Now consider a bond similar to the one in part(a), except now its coupon is tied to inflation, i.e. its coupon payment will be indexed by inflation but not the principal. Calculate the price of such bond assuming a 2% annual rate of inflation and 5% yield.
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