A 10-year, capital-indexed bond linked to the Consumer Price Index (CPI) is issued with a coupon rate of 6% and a par value of 1,000. The bond pays interest semi annually. During the first six months after the bond’s issuance, the CPI increases by 2%. On the first coupon payment date, the bond’s:

A. Coupon rate increases to 8%.

B. Coupon payment is equal to 40.

C. Principal amount increases to 1,020.