2. Refer to the file.

a. Interpret the nagative high yield.

b. What is the real rate and what is the nominal rate given a High Yield of -0.195%?

c. Is the high yield of -0.195% what the media calls negative interest rates?

TREASURY NEWS Department of the Treasury . Bureau of the Fiscal Service For Immediate Release April 21, 2016 CONTACT: Treasury Securities Services 202-504-3550 TREASURY AUCTION RESULTS Term and Type of Security CUSIP Number 5-Year TIPS 912828060 X-2021 Series Interest Rate High Yield . Allotted at High Adjusted Price Unadjusted Price Adjusted Accrued Interest per $1,000 Unadjusted Accrued Interest per $1,000 TIIN Conversion Factor per $1,000 0-18% 0.195% 53.48% 101.634854 101.596247 0.04783 50.04781 0.263705291 Modian Yield Low Yield -0425% Issue Date Maturity Date Original Issue Date April 29, 2016 April 15, 2021 April 29, 2016 April 15, 2016 Dated Date Tendered Accepted 38,623,642,000 $51,194,800 S0 $38,674,836,800 15,948,825,500 $51,194,800 S0 FIMA (Noncompetitive) Subtotal SOMA Total $16,000,020,300 So so $38,674,836,800 Tendered Primary Dealer Direet Bidder Indirect Bidder Total Competitive $23,725,000,000 $2,048,437,000 12,850,205,000 38,623,642.000 S5,229,762,000 $1,300,000,000 $9,419,063,500 $15,948,825,500