Question: Suppose that you buy a two - year 7 . 3 % bond at its face value, answer the following: a - 1 . What

Suppose that you buy a two-year 7.3% bond at its face value, answer the following:
a-1. What will be your total nominal return over the two years if inflation is 2.3% in the first year and 4.3% in the second?
a-2. What will be your total real return?
b. Now suppose that the bond is a TIPS. What will be your total 2-year real and nominal returns?

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