An inflation-indexed Treasury bond with a 5% coupon rate is issued at $1,000. If inflation in the year after issuance is 6%,
A)
the new coupon rate will be 11%.
B)
the new redemption value is $1,060.
C)
the new redemption value is $1,100.
D)
the bond is redeemed and a new bond with a 6% coupon is issued.
B
Business
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