Question: Consider a newly issued TIPS bond with a 3-year maturity, par value of $1,000, and coupon rate of 510%. Assume annual coupon payments. Inflation In

 Consider a newly issued TIPS bond with a 3-year maturity, par

Consider a newly issued TIPS bond with a 3-year maturity, par value of $1,000, and coupon rate of 510%. Assume annual coupon payments. Inflation In Coupon Princlpal Total Time Year Just Ended Par Value Payment 0 RepaymentPayment 31% 21% 41% $1,000.00 $1,031.00 $52.58 $1,052.65 $53.69 $1,095.81 $55.89 0 0 $1,095.81 $52.58 53.69 $1,15170 2 What is the nominal rate of return on the TIPS bond in the first year? 0 5.20% 0 5.26% 8.36% 9.30%

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