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The following table showing the cash flows for TIPS bonds. Inflation in Year Coupon Time Just Ended Par Value Payment $1,000.00 1 3.00% 1,030.00 $61.80
The following table showing the cash flows for TIPS bonds. Inflation in Year Coupon Time Just Ended Par Value Payment $1,000.00 1 3.00% 1,030.00 $61.80 2 3.00 1,060.90 63.65 2.00 1,082.12 64.93 Principal Repayment . Total Payment $ $ 61.80 63.65 1,147.95 1,082.12 a. What is the nominal rate of return on the bond in year 2? If real rate of return is 6.00% per annum (Round your answer to 2 places.) Nominal rate of return in year 2 96 b. What is the real rate of return in year 2? (Round your answer to 2 decimal places.) Real rate of return in year 2 96 E BP
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