Consider a 5.00 percent TIPS with an issue CPI reference of 203.6. The bond is purchased...

Consider a 5.00 percent TIPS with an issue CPI reference of 203.6. The bond is purchased at the beginning of the year (after the interest payment) when the CPI was 211.5. For the interest payment in the middle of the year, the CPI was 213.1. Now, at the end of the year, the CPI is 217.6 and the interest payment has been made.

What is the total return of the TIPS in dollars? Round your final answer to 2 decimal places

What is the total return of the TIPS in percentage? Round your final answer to 2 decimal places.

Expert Solution

Given,

Interest rate (r) = 5% or 0.05

CPI(beginning of year) = 211.5

CPI(mid of year) = 213.1

CPI(End of year) = 217.6

Solution :-

jeff jeffy answered 2 hours ago

Consider a 2.55 percent TIPS with an issue CPI reference of 193.8. The bond is purchased...

Consider a 2.55 percent TIPS with an issue CPI reference of 193.8. The bond is purchased at the beginning of the year (after the interest payment), when the CPI was 203.7. For the interest payment in the middle of the year, the CPI was 206.7. Now, at the end of the year, the CPI is 210.4 and the interest payment has been made. What is the total return of the TIPS in dollars? What is the total return of the...

Consider a 2.40 percent TIPS with an issue CPI reference of 190.5. The bond is purchased...

Consider a 2.40 percent TIPS with an issue CPI reference of 190.5. The bond is purchased at the beginning of the year (after the interest payment), when the CPI was 200.4. For the interest payment in the middle of the year, the CPI was 203.4. Now, at the end of the year, the CPI is 207.1 and the interest payment has been made. What is the total return of the TIPS in dollars? (Do not round intermediate calculations. Round...

Please do it by type not pics. 1.Consider a 3.05 percent TIPS with an issue CPI...

Please do it by type not pics. 1.Consider a 3.05 percent TIPS with an issue CPI reference of 184.9. At the beginning of this year, the CPI was 191.6 and was at 201.5 at the end of the year. What was the capital gain of the TIPS in dollars? What was the capital gain of the TIPS in percentage?

1. Consider an investor who, on January 1, 2017, purchases a TIPS bond with an original...

1. Consider an investor who, on January 1, 2017, purchases a TIPS bond with an original principal of $100,000, a 4.50 percent annual (or 2.25 percent semiannual) coupon rate, and 5 years to maturity. (LG 6-2) If the semiannual inflation rate during the first six months is 1.25 percent, calculate the principal amount used to determine the first coupon payment and the first coupon payment (paid on June 30, 2017). From your answer to part a, calculate the inflation-adjusted principal...

Consider an investor who, on January 1, 2019, purchases a TIPS bond with an original principal...

Consider an investor who, on January 1, 2019, purchases a TIPS bond with an original principal of $117,000, an 12 percent annual (or 6 percent semiannual) coupon rate, and 12 years to maturity. a. If the semiannual inflation rate during the first six months is 0.2 percent, calculate the principal amount used to determine the first coupon payment and the first coupon payment (paid on June 30, 2019) b. From your answer to part a, calculate the inflation-adjusted principal at...

Consider a newly issued TIPS bond with a three year maturity, par value of $1000, and...

Consider a newly issued TIPS bond with a three year maturity, par value of $1000, and a coupon rate of 7%. Assume annual coupon payments. Time Inflation in year just ended Par Value Coupon Payments Principal Payment Total Payment 0 $1000.00 1 3.0% 2 3.5% 3 4.5% a) Fill in the shaded cells with amounts in the above table. b) What is the nominal rate of return on the TIPS bond in the first year? c) What is the real...

17-1 Consider a 6 percent 10-year bond purchased at face value($1000). Assuming a reinvestment rate of...

17-1 Consider a 6 percent 10-year bond purchased at face value($1000). Assuming a reinvestment rate of 5 percent, calculate The interest on interest = the total dollar return = the realized compound yield =

New Homes has a bond issue with a coupon rate of 5.5 percent that matures in...

New Homes has a bond issue with a coupon rate of 5.5 percent that matures in 8.5 years. The bonds have a par value of $1,000 and a market price of $1,122. Interest is paid semiannually. What is the yield to maturity?

a corp.has a bond issue outstanding with a annual coupon rate of 8 percent and 20...

a corp.has a bond issue outstanding with a annual coupon rate of 8 percent and 20 years remaining to matunity.The interest payment is paid sermiannually.The par （face)value of the bond is$1,000.Bond investors require an 11 percent annual rate of return under present market conditions.That is,the yield to matunity is 11 percent Determine the intrinsic value of the bond

Consider a 10-year 6 percent coupon bond. What is the price of this bond if the...

Consider a 10-year 6 percent coupon bond. What is the price of this bond if the market yield is 6%? What is the price of this bond if the market yield is 7%? What is the price of this bond if the market yield is 5%?

Question