Question
A $1 comma 000 Treasury inflation-protected security is currently selling for $921 and carries a coupon interest rate of 5.39 percent. a. If you buy
A $1 comma 000 Treasury inflation-protected security is currently selling for $921 and carries a coupon interest rate of 5.39 percent.
a. If you buy this bond, how much will you receive for your first interest payment, assuming no interest adjustment to principal during this time period?
b. If there's a 1.06 percent increase in inflation, what will be the new par value of the bond?
c. What is your new semiannual interest payment?
d. What would the par value be at maturity, assuming a 2.75 percent annual inflation rate and ten-year maturity period?
Click on the table icon to view the FVIF table LOADING... .
a. If you buy this bond, assuming no interest adjustment to principal during this time period, your first interest payment would be $nothing . (Round to the nearest cent.)
b. If there's a 1.06 percent increase in inflation, the new par value would be $nothing . (Round to the nearest cent.)
c. The new semiannual interest payment is $nothing . (Round to the nearest cent.)
d. With a 2.75 percent annual inflation rate and ten-year maturity period, the par value at maturity would be $nothing . (Round to the nearest cent.)
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