Consider a 3.25 percent TIPS with an issue CPI reference of 186.4. At the beginn
ID: 2711616 • Letter: C
Question
Consider a 3.25 percent TIPS with an issue CPI reference of 186.4. At the beginning of this year, the reference CPI was 195.1 and was at 205.8 at the end of the year.
What was the capital gain of the TIPS in dollars? (Do not round intermediate calculations and round your final answer to 2 decimal places.)
What was the capital gain of the TIPS in percentage? (Do not round intermediate calculations and round your final answer to 2 decimal places.)
Consider a 3.00 percent TIPS with an issue CPI reference of 184.8. At the beginning of this year, the CPI was 191.5 and was at 201.6 at the end of the year.
What was the capital gain of the TIPS in dollars? (Do not round intermediate calculations and round your final answer to 2 decimal places.)
What was the capital gain of the TIPS in percentage? (Do not round intermediate calculations and round your final answer to 2 decimal places.)
What was the capital gain of the TIPS in dollars? (Do not round intermediate calculations and round your final answer to 2 decimal places.)
Explanation / Answer
Answer: Calculation of the capital gain of the TIPS in dollars:
Gain=End of year value-begining of year value
=(205.8/186.4)*$1000-(195.1/186.4)*$1000
=$1104.077-$1046.67
=$57.407
Answer: Calculation of the capital gain of the TIPS in percentage:
As a %, the return was=($57.407/$1046.67)*100
=5.48%
Answer: Calculation of the capital gain of the TIPS in dollars:
Gain=End of year value-begining of year value
=(201.6/184.8)*$1000-(191.5/184.8)*$1000
=$1090.91-$1036.26
=$54.65
Answer: calculation of the capital gain of the TIPS in percentage:
As a %, the return was=($54.65/$1036.26)*100
=5.2738%
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