One year ago, you purchased a newly-issued TIPS bond that has a 5% coupon rate, five years to maturity, and a par value of $1,000. The average inflation rate over the year was 3.2%. What is the amount of the coupon payment you will receive, and what is the current face value of the bond?
A) $50.00, $1,000
B) $32.00, $1,032
C) $50.00, $1,032
D) $32.00, $1,050
E) $51.60, $1,032
Correct Answer:
Verified
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