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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

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

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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sive Read 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
Transcribed Image Text:sive Read 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
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