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Consider a newly issued TIPS bond with a 3-year maturity, par value of $1,000, and coupon rate of 5%. Assume annual coupon payments. + =

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Consider a newly issued TIPS bond with a 3-year maturity, par value of $1,000, and coupon rate of 5%. Assume annual coupon payments. + = Inflation in year just ended Coupon payment Principal repayment Total payment Time 3% 29 4. Par value $1000.00 $1030.00 $1050.60 $1092.62 $51.50 $52.53 $54.63 $51.50 $52.53 $1,147.25 $1092.62 What is the real rate of return on the TIPS bond in the first year

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