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The following table showing the cash flows for TIPS bonds. Inflation in Year Just Ended Coupon Payment Principal Repayment Time 0 Total Payment 1 Par
The following table showing the cash flows for TIPS bonds. Inflation in Year Just Ended Coupon Payment Principal Repayment Time 0 Total Payment 1 Par Value $1,000.00 1,022.50 1,073.63 1,111.20 2.25% 5.00 3.50 2 $46.01 48.31 50.00 $ 0 1,111.20 $ 46.01 48.31 1,161.21 c. What is the nominal rate of return on the bond in year 3? (Round your answer to 2 decimal places.) Answer is complete but not entirely correct. Nominal rate of return in year 3 8.16 X % d. What is the real rate of return in year 3? (Round your answer to 2 decimal places.) X Answer is complete but not entirely correct. Real rate of return in year 3 4.50 X %
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