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

question 32

Multiple Choice

A ten-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 onthis information, the coupon payment after six months will be $____.

• A) 250
• B) 255
• C) 500
• D) 510

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