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Question #8 (20 Points): If you buy municipal bond (tax free) that cost $1,000 and will pay a 4.5% coupon for the next 20 years

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Question #8 (20 Points): If you buy municipal bond (tax free) that cost $1,000 and will pay a 4.5% coupon for the next 20 years (so the maturity date is in 20 years). At maturity the bond returns the original $1,000. If there is a 2% annual inflation, what real rate of return will you receive

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