•A TIPS purchased on January 1 carries a semiannual-pay coupon of 3.5%. •Par value is $10,000. •Annualized rate of inflation over the next six months is 4%. • • Compute the inflation-adjusted principal and coupon payment at the end of the first 6-month period.

inflation-adjusted principal = 10400 coupon payment = 10400*0.035=364

nope :slight_smile: I know guys may make mistake on this and that why Posted this. It may appear simple to many.

10200 357

10200 * .0175???

heha168 Wrote: ------------------------------------------------------- > 10200 > 357 still no :slight_smile:

10200 x 3.5%/2 = $178.50?

is 3.5% annual or semiannual?

just pay attention to adjusting for the inflation first and then calculate the coupon. Nerd got it correct.

I know the question is confusing.

yeah this is definitely one worth revisting quickly before exam.