One Year Ago,you Purchased a Newly Issued Real Return Bond

One year ago,you purchased a newly issued real return bond that has a 6% coupon rate,five years to maturity,and a par value of $1,000.The average inflation rate over the year was 4.2%.What is the amount of the coupon payment you will receive and what is the current face value of the bond?

A) $60.00,$1,000
B) $42.00,$1,042
C) $60.00,$1,042
D) $62.52,$1,042
E) $102.00,$1,000

Correct Answer:

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