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Consider a Newly Issued TIPS Bond with a 3-Year Maturity

Question 61

Multiple Choice

Consider a newly issued TIPS bond with a 3-year maturity, par value of $1,000, and coupon rate of 5%. Assume annual coupon payments.
Consider a newly issued TIPS bond with a 3-year maturity, par value of $1,000, and coupon rate of 5%. Assume annual coupon payments. What is the real rate of return on the TIPS bond in the first year? A) 5% B) 8.15% C) 7.15% D) 4%
What is the real rate of return on the TIPS bond in the first year?


A) 5%
B) 8.15%
C) 7.15%
D) 4%

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