Consider a 3.5 percent TIPS with an issue CPI reference of 185.6. The bond is purchased at the beginning of the year (after the interest payment), when the CPI was 193.5. For the interest payment in the middle of the year, the CPI was 195.1. Now, at the end of the year, the CPI is 199.6 and the interest payment has been made. What is the total return of the TIPS in dollars? What is the total return of the TIPS in percentage?

Consider a 3.5 percent TIPS with an issue CPI reference of 185.6. The bond is purchased at the beginning of the year (after the interest payment), when the CPI was 193.5. For the interest payment in the middle of the year, the CPI was 195.1. Now, at the end of the year, the CPI is 199.6 and the interest payment has been made. What is the total return of the TIPS in dollars? What is the total return of the TIPS in percentage?

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter13: Inflation

Section: Chapter Questions

Problem 12SQ

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