Consider a newly issued TIPS bond with a $3-$year maturity, par value of $$1,000,$ and coupon rate of $6\mathrm{.}00\%.$ Assume annual coupon paynents.

What is the nominal rate of return on the TIPS bond in the first year?

Multiple Choice

$12\mathrm{.}00\%$

$6\mathrm{.}24\%$

$10\mathrm{.}24\%$

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