Question: You purchase a U S Treasury inflation indexed bond at par value
You purchase a U.S. Treasury inflation-indexed bond at par value of $1,000. The bond offers a coupon rate of 6 % paid semiannually. During the first six months that you hold the bond, prices in the U.S. rise by 2%. What is the new par value of the bond, and what is the amount of your first coupon payment?
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