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Consider an investor who, on January 1, 2019. purchases a TIPS bond with an onginal principal of $119.000, an 10 percent annual (or 5 percent

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Consider an investor who, on January 1, 2019. purchases a TIPS bond with an onginal principal of $119.000, an 10 percent annual (or 5 percent semlannua) coupon rate, and 10 years to maturity. a. If the semiannual inflation rate during the first six months is 0.5 percent calculate the principal amount used to determine the first coupon payment and the first coupon payment (paid on June 30. 2019). b. From your answer to part a, calculate the Inflation-adjusted principal at the beginning of the second stx months c. Suppose that the semiannual Inflation rate for the second six-month penod is 1.3 percent. Calculate the inflation-adjusted principal at the end of the second six months (on December 31, 2019) and the coupon payment to the Investor for the second six-month period (For all requirements, round your answers to 2 decimal places. (e.g. 32.16) a Coupon payment b. Inflation-adjusted principal c inflation-adjusted principal at the end of the second six montns Coupon payment

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