Question: Please help. Refer to the table below and calculate both the real and nominal rates of return on the TIPS bond in the second and
Please help.
Refer to the table below and calculate both the real and nominal rates of return on the TIPS bond in the second and third years. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Principal and Interest Payments for a Treasury Inflation Protected Security Inflation in Year Just Ended Coupon Payment Principal Repayment Time + = Total Payment 1 3% Par Value $1,000.00 1,030.00 1,040.30 1,050.70 $41.20 41.61 2 1 $ 41.20 41.61 1,092.73 3 1 42.03 $1,050.70 Answer is complete but not entirely correct. Second Year Third Year Nominal return 4.99 % 5.09 % Real return 3.95 X % 4.05 X %
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