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Suppose that you buy a TIPS (inflation-indexed) bond with a 2-year maturity and a (real) coupon of 5.1% paid annually. If you buy the bond

Suppose that you buy a TIPS (inflation-indexed) bond with a 2-year maturity and a (real) coupon of 5.1% paid annually. If you buy the bond at its face value of $1,000, and the inflation rate is 9.65% in each year. What will be your cash flow in year 1?What will be your cash flow in year 2?What will be your real rate of return over the two-year period?

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