Calculate both real and nominal rates of return on tips bond

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Reference no: EM131577988

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 Time Inflation in Year Just Ended Par Value Coupon Payment + Principal Repayment = Total Payment 0 $ 1,000.00 1 2 % 1,020.00 $ 40.80 0 $ 40.80 2 3 1,050.60 42.02 0 42.02 3 1 1,061.11 42.44 $ 1,061.11 1,103.55 Second Year Third Year Nominal return % % Real return % %

Reference no: EM131577988

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