XYZ Mutual Fund is concerned about inflation in the future. Thus, XYZ Mutual Fund bought $200,000 of a principal adjusted US Treasury Bonds ("TIPS"). The Fund bought the Bonds at par value. The maturity for the Bonds is in 20 years, and the coupon rate is 3.5%. The inflation rate is 3% in year 1 and 4% in year 2. What is the principal amount of the bonds in 18 months?

A. 207,000.00

B. 206,045.00

C. 210,165.90

D. 214,369.22

E. 208,000.00

XYZ is AAA rated. XYZ makes artificial hip joints. XYZ just announced a massive recall of its hip implants. The lawsuits and liabilities related to the implants will force XYZ into bankruptcy. You are a portfolio manager that owns multiple XYZ bonds. The market has not adjusted the price of XYZ's debt yet. However, XYZ bonds are illiquid. As a result, you can sell only one of the XYZ bond issues that you own without a significant loss. Which bonds do you sell?

A. Over-collateralized First Mortgage Bonds

B. Senior Secured

C. Debentures

D. Senior Unsecured

E. Senior Subordinated