A 4 -year TIPS bond has an annual coupon rate of 4 percent and a starting face value of $1,000. The actual inflation rate turned out to be 3 percent every year for each of the 4 years.
What will be the face value of the bond at the end of Year 4 ?
- $1,225
- $1,000
- $1,200
- $1,126
- $1,030
