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fx =13 B E H K 1 2 3 4 a Understanding TIPS and inflation If an investor purchases a 4.7% two-year TIPS and the CPI increases 2.0% over the first year and 3.1% over the second year, how much does the investor receive at maturity? Face value= $ 1,000.00 CPI Nominal Real Stated coupon rate= 4.7% Year Inflation Cash Flow Cash Flow 1 2.0% 2 3.10% 5 6 7 8 9 10
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