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16. You buy a 2 year TIPS directly from the Treasury on January 1, 2020. You pay the face value of $1,000. During 2020 and

16. You buy a 2 year TIPS directly from the Treasury on January 1, 2020. You pay the face value of $1,000. During 2020 and 2021, the CPI drops by a total of 7%. How much will the Treasury pay you on December 31, 2021 (ignoring coupon payments)?

A. $930

B. 860

C. 1,000

D. 1,070

E. None of the above

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