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mars1129 [50]
3 years ago
12

an investor buys a 10000 par 4.25 percent annual coupon tips security with three years to maturity. if inflation every sic month

s iver the investors holding period is 2.5 percent( what is the final payment the tips investor will receive
Business
1 answer:
mr_godi [17]3 years ago
8 0

Answer:

the  final payment that investor would received is $11,843.36

Explanation:

The computation of the final payment that investor would received is shown below:

Adjusted face value is

= 10,000 × (1 + 2.5%)^(3 × 2)

= 11,596.93

Final payment = Coupon + adjusted principal

= 11596.93 × 4.25% ÷ 2 + 11,596.93

= $11,843.36

hence, the  final payment that investor would received is $11,843.36

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