Business Finance
Bond annual coupon payment

Question Description

I’m working on a Business exercise and need support.

What is the annual coupon payment paid in year 2 of a 10 year maturity TIPS with a par value of $1,000, annual coupon rate of 4%, and inflation of 1% in year 1, 2% in year 2 and 4% in year 3?

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Final Answer

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2/100*1000*1=$20

1000+20=$1020

the above is the coupon payment in year 2.


Please let me know if you need any clarification. I'm always happy to answer your questions.

589189pnm (105)
Carnegie Mellon University

Anonymous
Return customer, been using sp for a good two years now.

Anonymous
Thanks as always for the good work!

Anonymous
Excellent job

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