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Consider a newly issued TIPS bond with de-year maturity, par value of $1000, and a coupon rate of 49. Assume annual coupon. Inflation rates in
Consider a newly issued TIPS bond with de-year maturity, par value of $1000, and a coupon rate of 49. Assume annual coupon. Inflation rates in the first, second and third year are given as 19, 29, 3%. Calculate the real rate of return of Tips in the second year. 9.5% 5.04% 49 8.69
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