TIPS Capital Return Consider a 4.25 percent TIPS with an issue CPI reference of 187.10. At the beginning of this year, t...
TIPS Capital Return Consider a 4.25 percent TIPS with an issue CPI reference of 187.10. At the beginning of this year, the CPI was 197.90 and was at 203.20 at the end of the year. What was the capital gain of the TIPS in dollars? (Round your answer to 2 decimal places.)
Homework Answers
The capital gain of the TIPS in dollars is computed as shown below:
= [ ( CPI at the end - CPI at the beginning ) / CPI reference ] x 1,000
= [ ( 203.20 - 197.90 ) / 187.10 ] x 1,000
= 28.33 Approximately
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