You Buy a TIPS at Issue at Par for $1,000

question 57

Multiple Choice

You buy a TIPS at issue at par for $1,000.The bond has a 3% coupon.Inflation turns out to be 2%,3% and 4% over the next three years.The total annual coupon income you will receive in year three is _________.

• A) $30.00
• B) $33.00
• C) $32.78
• D) $30.90

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Definitions:

Compulsion

Repetitive and irrational behaviors or mental acts that an individual feels driven to perform, often associated with obsessive-compulsive disorder.

Repeatedly Washing

Often associated with obsessive-compulsive disorder (OCD), this behavior involves the compulsive urge to wash one's hands or objects to alleviate distress or anxiety.

Obsessive-Compulsive Disorder

A chronic and long-lasting disorder in which a person has uncontrollable, reoccurring thoughts (obsessions) and behaviors (compulsions) that he or she feels the urge to repeat over and over.

Counts Heartbeats

Refers to the process or practice of measuring or tracking the number of heartbeats per unit of time, typically used in health monitoring and fitness contexts.