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You purchased a 1 0 - year $ 1 0 0 , 0 0 0 TIPS bond with dividend of 4 % per year payable
You purchased a year $ TIPS bond with dividend of per year payable semiannually ie $ every six months Assume there is no inflation adjustment for the first five years, but in years through ten, the bond face value increases by $ each yea year compounded semiannually.
a What is the total net amount of money that you will have received during the tenyear life of the bond without any consideration of dividend reinvestment?
b What will be the equivalent future value for all the income received with dividend reinvestment included?
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