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4. Use the provided Wall Street Journal handouts to complete the following tables. TIPS Maturity Coupon Bid Asked Chg Yield* Accrued Principal 1068 10/15/2024 0.125

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4. Use the provided Wall Street Journal handouts to complete the following tables. TIPS Maturity Coupon Bid Asked Chg Yield* Accrued Principal 1068 10/15/2024 0.125 107.15 107.17 -17 -2.377 Treasury Notes & Bonds Maturity 10/31/2024 Coupon 1.500 Bid 101.2120 Asked 101.2160 Chg -0.0920 Asked Yield 0.919% YTM = Security Maturity Real rate of return (%) + Implied inflation rate in the market (%) (%) 10/15/2024 = + TIPS Treasury note/bond 10/31/2024 Assume Bill believes with 100% certainty that the inflation rate will be 3.000% over the next 3 years. If Bill wants a 3-year investment, should he buy the Treasury note/bond or TIPS? Assume Hillary believes with 100% certainty that the inflation rate will be 2.000% over the next 3 years. If Hillary wants a 3-year investment, should he buy the Treasury note/bond or TIPS? Assume Barack believes with 100% certainty that the inflation rate will be 1.000% over the next 3 years. If Barack wants a 3-year investment, should he buy the Treasury note/bond or TIPS? 4. Use the provided Wall Street Journal handouts to complete the following tables. TIPS Maturity Coupon Bid Asked Chg Yield* Accrued Principal 1068 10/15/2024 0.125 107.15 107.17 -17 -2.377 Treasury Notes & Bonds Maturity 10/31/2024 Coupon 1.500 Bid 101.2120 Asked 101.2160 Chg -0.0920 Asked Yield 0.919% YTM = Security Maturity Real rate of return (%) + Implied inflation rate in the market (%) (%) 10/15/2024 = + TIPS Treasury note/bond 10/31/2024 Assume Bill believes with 100% certainty that the inflation rate will be 3.000% over the next 3 years. If Bill wants a 3-year investment, should he buy the Treasury note/bond or TIPS? Assume Hillary believes with 100% certainty that the inflation rate will be 2.000% over the next 3 years. If Hillary wants a 3-year investment, should he buy the Treasury note/bond or TIPS? Assume Barack believes with 100% certainty that the inflation rate will be 1.000% over the next 3 years. If Barack wants a 3-year investment, should he buy the Treasury note/bond or TIPS

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