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Consider a Newly Issued TIPS Bond with a Three Year

Question 5

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Consider a newly issued TIPS bond with a three year maturity, par value of $1000, and a coupon rate of 5%. Assume annual coupon payments. Consider a newly issued TIPS bond with a three year maturity, par value of $1000, and a coupon rate of 5%. Assume annual coupon payments. What is the nominal rate of return on the TIPS bond in the first year? A) 5.00% B) 5.15% C) 8.15% D) 9.00% What is the nominal rate of return on the TIPS bond in the first year?


A) 5.00%
B) 5.15%
C) 8.15%
D) 9.00%

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