H6: Chapter 3 and a few left in chapter 6,7 6 Saved Help Save & Exit Submit Check my work Suppose that you buy a TIPS (inflation-indexed) bond with a 2-year maturity and a coupon of 4.5% paid annually. Assume you buy the bond at its face value of $1,000, and the inflation rate is 8.75% in each year. 10 points a. What will be your cash flow in year 1? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Cash flow 48.94 02:58:47 eBock b. What will be your cash flow in year 2? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Cash flow This is a numeric cell, so please enter numbers only. C. What will be your real rate of return over the two-year period? (Round your answer to 1 decimal place.) Real rate of return Mc Graw KPrev 11 of 15 Next>