A TIPS bond will pay a different coupon amount depending upon inflation each year. Suppose...
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A TIPS bond will pay a different coupon amount depending upon inflation each year. Suppose that a 30 year TIPS bond is expected to pay a coupon of 5% for the first ten years, then 7% for the next ten years, then 9% for the last ten years. If the yield-to-maturity is 7%, and coupons are paid annually, then what is the price of this bond?
$1,203.42
$1,220.68
$1,081.61
$895.83
$1,098.87
A TIPS bond will pay a different coupon amount depending upon inflation each year. Suppose that a 30 year TIPS bond is expected to pay a coupon of 5% for the first ten years, then 7% for the next ten years, then 9% for the last ten years. If the yield-to-maturity is 7%, and coupons are paid annually, then what is the price of this bond?
| $1,203.42
| ||
| $1,220.68 | ||
| $1,081.61
| ||
| $895.83
| ||
| $1,098.87
|
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