A 10-Year, Capital-Indexed Bond Linked to the Consumer Price Index

question 27

Multiple Choice

a 10-year, capital-indexed bond linked to the Consumer Price index (CPi) is issued with a coupon rate of 6% and a par value of 1,000. The bond pays interest semi-annually. During the first six months after the bond's issuance, the CPi increases by 2%. on the First coupon payment date, the bond's:

• A) coupon rate increases to 8%.
• B) coupon payment is equal to 40.
• C) principal amount increases to 1,020.

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Definitions:

Sales Revenue

The total amount of money generated from sales of goods or services before any expenses are subtracted.

Unit Sales

A measure of the total quantity of products sold by a company, not taking into account the revenue generated from these sales.

Drugstore Channel

A distribution channel that includes pharmacies and drugstores, through which healthcare products, medications, and various retail goods are sold.

Flavors Carried

The variety or range of tastes offered by a food or beverage product, indicating the different options available to consumers.