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Q 2 : Today Tim purchased a 1 0 - year, $ 1 , 0 0 0 face value with 4 . 8 9 %

Q2: Today Tim purchased a 10-year, $1,000 face value with 4.89% coupon rate compounding semi-annually
at yield-to-maturity of 5.07% compounding semi-annually. Assume Tim would sell his bond in one year when
yield-to-maturity would change to 4.96% compounding semi-annually. Over the one year inflation would be
5.58%.
What is the bond price Tim paid today?
What would be the bond price Tim would sell in one year?
The real return of Tim's investment if we consider inflation should be
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