Question

An investor buys a $10,000 par, 4.25% annual coupon TIPS security with 3 years to maturity. If inflation every six months over the investor's holding period is 2.50%, what is the final payment the TIPS investor will receive?
A. $10,213.00
B. $10,869.28
C. $11,822.25
D. $11,843.37
E. $12,201.11

Answer

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