answers are as follows:

a. In year 2, the nominal rate of return is (1 + 0.04) (1.06) 1 = 9.72%. b. In year 2, the real rate of return is 5.50%. c. In year 3, the nominal rate of return is (1 + 0.04) (1.06) 1 = 10.24%. d. In year 3, the real rate of return is 6.00%.

PLEASE EXPLAIN WHERE ALL NUMBERS COME FROM, (for example, where did the 1.06 come from in the answer to Part A?)

Thank you

The following table showing the cash flows for TIPS bonds. a. What is the nominal rate of return on the bond in year 2 ? If real rate of return is 5.50% per annum (Round your answer to 2 decimal places.) b. What is the real rate of return in year 2 ? (Round your answer to 2 decimal places.) c. What is the nominal rate of return on the bond in year 3 ? (Round your answer to 2 decimal places.) d. What is the real rate of return in year 3? (Round your answer to 2 decimal places.)