A 10-Year, Inflation-Indexed Bond Has a Par Value of $10,000

question 10

Multiple Choice

A 10-year, inflation-indexed bond has a par value of $10,000 and a coupon rate of 5 percent. During the first six months since the bond was issued, the inflation rate was 2 percent. Based on this information, the coupon payment after six months will be $____.

• A)250
• B)255
• C)500
• D)510

---

Definitions:

Sample Sizes

The number of observations or elements chosen from a population to be included in a sample, affecting the accuracy and reliability of statistical analysis.

F-test

A statistical test used to compare two populations' variances to ascertain if they come from distributions with equal variances.

Equal Variances

A condition in which two or more data sets have the same variance, indicating a similar degree of data spread around the mean.

Normally Distributed

Describes how data points in a dataset are distributed in a pattern that resembles a bell curve, with most values clustering around a central point.