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Posted on Jul 23, 2024

You own a TIPS bond that has a 5% coupon, pays semiannually, and has 1.5 years left to maturity. Inflation is 2% in the first

You own a TIPS bond that has a 5% coupon, pays semiannually, and has 1.5 years left to maturity. Inflation is 2% in the first six months, 50 basis points in the next six months, and finally 1.2% in the last six months. Yield is 5%. Calculate the price.

A - 966.08

B - 1000

C - 1001.97

D - 1036.68

E - None of the Above

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