Question
You have invested in $1,000 20-year Inflation Indexed Linked Bond (TIPS) with a 2% coupon and an inflation rate of 4%. 1. At maturity, what
You have invested in $1,000 20-year Inflation Indexed Linked Bond (TIPS) with a 2% coupon and an inflation rate of 4%.
1. At maturity, what will the principal be should the inflation rate stay constant throughout the life of the TIPS?
2. What coupon payment will you receive will at the end of year one.
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Financial management theory and practice
Authors: Eugene F. Brigham and Michael C. Ehrhardt
12th Edition
978-0030243998, 30243998, 324422695, 978-0324422696
