Question: Consider a newly issued TIPS bond with a 3-year maturity, par value of $1,000, and coupon rate of 4.20%. Assume annual coupon payments. Coupon payment

Consider a newly issued TIPS bond with a 3-year maturity, par value of $1,000, and coupon rate of 4.20%. Assume annual coupon payments. Coupon payment + Principal = repayment Total payment Inflation in Time year just ended Par value $1,000.00 2.2% $1,022.00 1.2% $1,034.26 3.2% $1,067.36 $42.92 $43.44 $44.83 $1,067.36 $ 42.92 $ 43.44 $1,112.19 What is the nominal rate of return on the TIPS bond in the first year

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