Assume you purchased a 10,000 face value semi-annual TIPS one year ago. The coupon rate is 0.75%. Assume the first 6 months of inflation were 8.5% and the second 6-months saw inflation of 5.78 %. What is the dollar amount of interest you receive for your second coupon payment?

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Assume you purchased a 10,000 face value semi-annual TIPS one year ago. The coupon rate is 0.75%. Assume the first 6 months of inflation were 8.5% and the second
6-months saw inflation of 5.78 %. What is the dollar amount of interest you receive for your second coupon payment?
Transcribed Image Text:Assume you purchased a 10,000 face value semi-annual TIPS one year ago. The coupon rate is 0.75%. Assume the first 6 months of inflation were 8.5% and the second 6-months saw inflation of 5.78 %. What is the dollar amount of interest you receive for your second coupon payment?
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