Question: Consider a newly issued TIPS bond with a 3-year maturity, par value of $1,000, and coupon rate of 5%. Assume annual coupon payments. = Time

 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 5%. Assume annual coupon payments. = Time Inflation in year just ended + Principal repayment Total payment Coupon Par value payment $1000.00 $1030.00 $51.50 $1050.60 $52.53 $1092.62 $54.63 3% 2% O 0 $1092.62 $ 51.50 $ 52.53 $1,147.25 4% What is the real rate of return on the TIPS bond in the first year

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