![15 [Problem Set 2_CH12: Innovative Government Bonds] Consider the following information of a Treasury Inflation-Protected Sec](http://img.homeworklib.com/questions/6155b9a0-ca7b-11ea-9ad7-f7e52c64a9fa.png?x-oss-process=image/resize,w_560)
Homework Answers
In TIPS principle amount will be adjusted with inflation rate
Inflation is 3% every year
Inflation adjusted price is
= 1000(1.03)^2 = 1060.9
Coupon rate is 5%
= 1060.9×5% = 53.045
So correct answer is C
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15 [Problem Set 2_CH12: Innovative Government Bonds] Consider the following information of a Treasury Inflation-Protected Security...
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