An investor purchases a TIPS bond with a 3% coupon. During the first year, if the inflation rate is 8%, the principal value of the security at the end of that year will be closest to:

assuming that the cost of the bond was originally $1,000, its principal will be adjusted to $1,000 x (1 + 8%) = $1,080 at the end of the year.

Explanation:

TIPS stand for Treasury Inflation-Protected Securities, which means that the principal value of the security will be adjusted to inflation. The coupon rate is not adjusted, but since the principal is, if inflation rises, you will receive a higher coupon rate and the maturity value of the security will also increase.

bd = 9 cm

step-by-step explanation:

in a 30°-60°-90° triangle, the ratio of side lengths is 1 : √3 : 2. that is, the longest side (hypotenuse) is twice the length of the shortest side.

all of the triangles in your geometry are 30°-60°-90° triangles. ac is the hypotenuse of δacd, and the short side of δabc.

the short side ad of δacd will be half the length of ac, so 3 cm. the hypotenuse ab of δabc will be twice the length of ac, so 12 cm. segment bd is the difference of the lengths ab and ad, so is

bd = ab -ad

bd = 12 cm - 3 cm = 9 cm

comment on side length ratios

you can figure the ratios of side lengths in a 30°-60°-90° triangle by considering the trig ratios of the angles. or you can figure the length of the altitude of an equilateral triangle of side length 2 using the pythagorean theorem.

answer may be d i think