Suppose that you buy a two year 7.1%bond at its face value.

a-1. What will be your total nominal return over the two years if inflation is 2.1% in the first year and 4.1% in the second? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

Nominal return____%

a-2. What will be your total real return? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

Real return____%

Now suppose that the bond is a TIPS. What will be vour total 2-vear real and nominal returns? (Do not round intermediate calculations)

real return ___%

nominal return___%