Assuming you have an inflation linker that pays an annual coupon of 2.5% every half a year and the real yield is 3%. What will be the price of the if it matures after 3.5 if you assume that the total inflation during this period was 5.5% ? Assume the principal is 100.

Hint: Find the price without the inflation and then apply the adjustment as we did in class

		103.76
		98.35
		102.76
		104.2