6) You are concerned that the inflation rate (CPI) in the United States is likely to increase in the next year and therefore BUY a Treasury Inflation protected Security (TIPS). The bond has a par value of $1,000. If the inflation rate (CPI) next year is 6.5% what will the par value of your bond adjust to? 6) SYSTEM WILL NOT ACCEPT $ SIGN. ENTER ANSWER AS A WHOLE NUMBER AND 2 DECIMAL PLACES

7) Use the following information to calculate the value of a ZERO COUPON BOND.

Par Value= $1,000 Interest Rate= 6% Time to Maturity= 6 years ANNUAL COMPOUNDING

ENTER ANSWER AS A WHOLE NUMBER AND 2 DECIMAL PLACES

8) Use the following information to calculate the price of this bond

Par Value= $1000 Coupon rate= 8% Current interest rate= 5.5% Maturity= 8 years Semi Annual Interest Payments