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There is a freshly issued 10 year inflation-linked bond with a face value of $1,000. Inflation in the coming year is 3%. What is the
There is a freshly issued 10 year inflation-linked bond with a face value of $1,000. Inflation in the coming year is 3%. What is the principal at the beginning and end of this year and the coupon this year and next year, for
A) a zero-coupon inflation-indexed bond?
B) a bond with a 5% annual coupon rate that is interest-indexed,
C) a bond with a 5% coupon rate that is capital-indexed?
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