If an Investor Purchases a 3%, 5-Year Bond at Its

question 84

Multiple Choice

If an investor purchases a 3%, 5-year bond at its par value of $1,000 and the CPI increases 3% over each of the next 5 years, what will be the real value of the principal at maturity?

• A)$1,000.00
• B)$1,030.00
• C)$1,060.90
• D)$1,061.36