Practice questions for Assignment 6 AV Read 1. You own a TIPS bond that matures in 4 years. The bond makes annual payments, has a 7% coupon rate, and the YTM is 6%. You expect the inflation rate over the first year to be 1.1%, 1.5% in the second year, 1.0% in the third year, and 2.6% in the fourth year. What is the price of this bond? Ans: 1092.86

Practice questions for Assignment 6 1. You own a TIPS bond that matures in 4 years. The bond makes annual payments, has a 7% coupon rate, and the YTM is 6%. You expect the inflation rate over the first year to be 1.1%,1.5% in the second year, 1.0% in the third year, and 2.6% in the fourth year. What is the price of this bond? Ans: 1092.86