Question 1: A four year TIPS bond promise a real annual coupon return of 4 percent, and the face value is $1,000.
The annual inflation rate was zero at the time it was issued; the inflation rate is now 3% and is expected to remain at this level for the four year term.
What will be the amount of interest paid in nominal dollars each year of the bond's life, and what will be the face value of the bond at the end of each year of its life?
Question 2: ow to compute the after tax yield to maturity, if a 10yr US bond was purchased for $800, coupon rate of 10%, at time of purchase still have 5yrs to mature-and the bond was held until it matures, and collect $1,00 par value, with a marginal rate of 28%.