A 3.125 percent TIPS has an original reference CPI of 185.7. If the current CPI is 211.0, what is the par value and current interest payment of the TIPS? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) |
Lets assume the original par value is $1000
Current par value = original par value * (current CPI / original CPI)
Current par value = $1000 * (211.0 / 185.7) = $1136.24
current interest payment = current par value * coupon rate = $1136.24 * 3.125% = $35.51
A 3.125 percent TIPS has an original reference CPI of 185.7. If the current CPI is...
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Consider a 3.25 percent TIPS with an issue CPI reference of 186.7. At the beginning of this year, the CPI was 197.5 and was at 202.4 at the end of the year. What was the capital gain of the TIPS in dollars? (Assume semi-annual interest payments and $1,000 par value.)
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