Cameron hates inflation, so he purchased a 10-year, 5%, $10,000 real return bond to prevent his return from being eroded by inflation. Over the past year the Consumer Price Index increased by 2.5%. Because it is a real return bond, the face amount or par value will now be? 

Answer rating: 100% (QA)

The face amount par value of the bond will increase by the rate of inflation to ... View the full answer