MamaBearr292 MamaBearr292

02-06-2023
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Consider an inflation indexed bond. For simplicity, let us assume that it is a one-year instrument with interest paid annually. Suppose that you invest $1000 in the bond and that inflation is at 10% a year. Assume that the relevant tax rate is 28%. How much money will you have at the end of the year, if the bond coupon is 2%?

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