A financial analyst at JPMorgan Chase is evaluating a Treasury Inflation-Protected Security (TIPS bond) with a 3-year maturity, par value of $1,000, and a 8% coupon rate. The estimated average inflation rate will be 5% over the first year, 5% over the second year, and 5% over the third year.

What is the amount of the coupon payment the bond holder will receive in the first year ?sample answer: $45)

Second year ? (sample answer: $45)

What will be the face value of the bond at the end of first year ? (sample answer: $1,245.45)

The second year ? (sample answer: $1,245.45)