Personal Finance: Turning Money into Wealth, Student Value Edition (7th Edition) (The Pearson Series in Finance)
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Chapter 13, Problem 2PA
Summary Introduction

(a)

To determine:

First interest payment.

Introduction:

Treasury inflation protected security is the U.S. government backed security. It is called inflation protected because its par value adjusts according to inflation and deflation.

Summary Introduction

(b)

To determine:

New par value.

Introduction:

Coupon rate is the rate at which the return is given to the bond holder. It is just like interest rate on any other security.

Summary Introduction

(c)

To determine:

New semiannual interest payment.

Introduction:

Par value refers to the price of the bond which is returned to the shareholder at maturity of the bond.

Summary Introduction

(d)

To determine:

Par value at maturity.

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What happens to my bond when interest rates rise?; Author: The Financial Pipeline;https://www.youtube.com/watch?v=6uaXlI4CLOs;License: Standard Youtube License