One Year Ago, You Purchased a Newly-Issued TIPS Bond That

question 20

Multiple Choice

One year ago, you purchased a newly-issued TIPS bond that has a 4% coupon rate, five years to maturity, and a par value of $1,000. The average inflation rate over the year was 3.6%. What is the amount of the coupon payment you will receive, and what is the current face value of the bond?

• A) $40.00, $1,000
• B) $41.44, $1,036
• C) $40.00, $1,036
• D) $36.00, $1,040
• E) $76.00, $1,000

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Definitions:

Poverty

A state where an individual or community lacks the financial resources and essentials for a minimum standard of living.

Traditional Parenting

The conventional methods of raising children, often characterized by strict discipline and adherence to long-established practices.

Leading Cause

The primary factor or condition responsible for a particular event or phenomenon, such as a leading cause of death.

Infant Death

The occurrence of a baby dying within the first year of life, often due to congenital conditions, preterm birth, or during childbirth.