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Consider a newly issued TIPS bond with a 3-year maturity, par value of $1,000, and coupon rate of 4.70%. Assume annual coupon payments. CouponPrincipal Total
Consider a newly issued TIPS bond with a 3-year maturity, par value of $1,000, and coupon rate of 4.70%. Assume annual coupon payments. CouponPrincipal Total Payment Inflation in Time Year Just Ended Par Value Payment Repayment 0 27% 1.7% 3.7% $1,000.00 $1,027.00 $48.27 $1,044.46 $49.09 1,083.11 $50.91 0 0 $1,083.11 $48.27 $49.09 $1,134.02 2 What is the nominal rate of return on the TIPS bond in the first year
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