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Consider the following TIPS bond purchased one year ago. The bond had an original principal value of $1,000 and pays a 10% annual coupon payment
Consider the following TIPS bond purchased one year ago. The bond had an original principal value of $1,000 and pays a 10% annual coupon payment that is paid semiannual. Inflation for the first 6 months was 2.4% while inflation for the second 6 months was 1.2%. What is the current principal amount and what is the amount of the second coupon payment?
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