A TIPS Is Quoted at 101:17

question 39

Multiple Choice

A TIPS is quoted at 101:17. How should this quote be interpreted in relation to a $1,000 face value bond?

• A) The current yield on this security is 1.17 percent.
• B) The bond is currently selling at the discounted price of $101.17.
• C) The bond will mature at a price equal to 101.17 percent of $1,000.
• D) A $1,000 bond is currently selling for 101 and 17/32^nds percent of $1,000.
• E) A $1,000 bond will mature at a price equal to 101 and 17/32^nds percent of $1,000.