Suppose that you buy a TIPS (inflation-indexed) bond with a 1-year maturity and a coupon of 4% paid annually. Assume you buy the bond at its face value of $1,000, and the inflation rate is 8%
What will be your cash flow at the end of the year? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
What will be your real return? (Enter your answer as a whole percent.
What will be your nominal return? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)