d: A TIPS bond has a coupon rate of 4%, with semi- annual coupon payments and 1.5 years to maturity for an initial principal of $1,000. Assume the semi-annual inflation rates are 1%, 2%, 3% and for the 3 semi-annual periods (these rates are already 6 month rates). Noticed, all the CF are at the end of the semi-annual

for #4, 5 & 6, we use this same bond: A TIPS bond has a coupon rate of 4%, with semi- annual coupon payments and 1.5 years to maturity for an initial principal of $1,000. Assume the semi-annual inflation rates are 1%, 2%, 3% and for the 3 semi-annual periods (these rates are already 6 month rates). Noticed, all the CF are at the end of the semi-annual.

1-Calculate the bonds cashflow at time t=1.5, round to nearest cents.

2- Assume the bond BEY is 4.75%. Joe 5,000 bonds so how much will he have to pay, round to nearest cents?

31Assume the require returns are 3%, 2% & 1% in the respective 1st, 2nd and 3rd semiannuals (these rate are already 6-month rates). What is the price of this bond, round to nearest cents?