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Required: 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 Tine Just Ended Nominal retum Real retum Far Value $1,000.00 1,020.00 1.050.40 1.061.11 Second Year N Coupon Payment 361.20 63.04 43.47 Third Year Principal Repayment 0 0 $ 1,061.11 Total Payment $ 41.20 63.04

Required: 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 Tine Just Ended Nominal retum Real retum Far Value $1,000.00 1,020.00 1.050.40 1.061.11 Second Year N Coupon Payment 361.20 63.04 43.47 Third Year Principal Repayment 0 0 $ 1,061.11 Total Payment $ 41.20 63.04

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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7 Book Required: 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 Tine Just Ended 0 24 3 Nominal retum Real retur Par Value $1,000.00 1,020.00 1,050.60 1.061.11 Second Year % coupon Payment $61.20 63.04 63.67 Third Year. Principal Repayment $1,061.11 Total Payment $61.20 63.04 1,124.77
Transcribed Image Text:7 Book Required: 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 Tine Just Ended 0 24 3 Nominal retum Real retur Par Value $1,000.00 1,020.00 1,050.60 1.061.11 Second Year % coupon Payment $61.20 63.04 63.67 Third Year. Principal Repayment $1,061.11 Total Payment $61.20 63.04 1,124.77
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