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11. On 15 July 2020, the government of a country issued an index-linked bond of term 10 years. Coupons are paid half-yearly in arrears on 15 January and 15 July each year. The annual nominal coupon is 1.5%. Interest and capital payments are indexed by reference to the value of an inflation index with a time lag of three months. You are given the following values of the inflation index: Date April 2020 April 2021 July 2021 August 2021 Inflation index 292.6 301.1 305.5 307.4 The inflation index is assumed to increase continuously at the rate of 2% per annum effective from its value in August 2021. A non-tax-paying investor purchased 10000 nominal of the stock on 15 July 2021, just after a coupon payment had been made. (a) Calculate the real value of the first coupon payment received by the investor, using the purchasing power at 15 July 2021. (4 marks) (b) Calculate the real value of the redemption payment received by the investor, using the purchasing power at 15 July 2021. 2 marks (e) Calculate the price of the bond to this investor such that a real yield of 2.5% per annum effective is obtained, and assuming that the investor holds the bond to maturity. (5 marks [Total 11 marks)