Solution-What is the expected bond value

What is the expected bond value

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The real rates are 1.5% per year every year. The expected inflation rate is 7% in the first year, 5% in the second year, and 4% in the third year. A Treasury bond with a 6% coupon pays coupon annually (not semiannually). Based on Slide #26, what is the expected bond value? Keep the final answers in 2 decimal places, e.g., $10.12.

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What is the expected bond value

Reference no: EM133122764

Reference no: EM133122764

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