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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 on this information, the coupon payment after six months will be $____.​

Respuesta :

Answer: $255

Explanation:

Given that,

Par value of bond = $10,000

Coupon rate = 5 percent

Inflation rate = 2 percent

Principal amount after six months = $10,000 × ( 1 + 2%) = $10,200

Coupon payment after six months = [tex]\frac{Coupon\ rate}{2} \times principle[/tex]

=[tex]\frac{0.05}{2} \times 10200[/tex]

= $255

∴  The coupon payment after six months will be $255.

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