A 375 Percent TIPS Has an Original Reference CPI of 183

question 102

Multiple Choice

A 3.75 percent TIPS has an original reference CPI of 183.9. If the current CPI is 214.7, what is the current interest payment? (Assume semiannual interest payments and a par value of $1,000.)

• A) $43.78
• B) $37.50
• C) $21.89
• D) $18.75

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Definitions:

Payee

The individual or entity to whom a check, draft, or promissory note is made payable.

First in Time

A principle stating that rights or privileges are assigned to those who are first to take action or establish legal claim.

Priority in Bankruptcy

The ranking order established by bankruptcy law that determines the sequence in which creditors are paid from a debtor's estate.

Accounts Receivables

The amounts of money owed to a company by customers for goods or services that have been delivered or used but not yet paid for.