A ten-year, inflation-indexed bond has a par value of $10,000 and a coupon rate of 5 percent. During the first six months since the bond was issued, the inflation rate was 2 percent. Based onthis information, the coupon payment after six months will be $____.

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The inflation-indexed bond adjusts its principal based on inflation. After 6 months, the principal is adjusted to $10,200 ($10,000 * 1.02). The semi-annual coupon payment is 5% of the adjusted principal divided by 2, which is $255 ($10,200 * 0.05 / 2).

A Ten-Year, Inflation-Indexed Bond Has a Par Value of $10,000