You Purchase a Treasury Inflation-Protected Note with an Original Principal

question 3

Multiple Choice

You purchase a Treasury inflation-protected note with an original principal amount of $1,000,000 and a 2.8 percent annual coupon (paid semiannually) . What will the first coupon payment be if the semiannual inflation over the first six months is 1.2%?

• A) $14,168
• B) $14,000
• C) $28,336
• D) $28,000
• E) $12,336

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Definitions:

Retrieval Cue

A trigger or stimulus that aids the recall of information from memory.

Long-Term Memory

The phase of memory responsible for the storage of information over extended periods, potentially as long as a lifetime.

Retention Interval

The period between learning or experiencing something and retrieving the memory of that event.

Semantic Information

Information related to the meanings of words or signs and their underlying concepts, not just the symbols themselves.