If You Own a TIPS Bond That Promises an Inflation-Adjusted

If you own a TIPS bond that promises an inflation-adjusted rate of return of 2.5 percent, and annual inflation is 3 percent in a given year,

A) you will be paid a higher rate of interest on the bond the following year.
B) your bond's face value in the following year will be increased by the inflation rate, resulting in an increase in the amount of interest paid.
C) the dollar amount of interest you receive will go down in the following year to compensate for inflation.
D) both the bond face value and the coupon rate will be increased by 3 percent the following year.