Question
A 3-year TIPs bond has a real yield of 3% and a price of $100. Assume CPI for the next 3 years is 2%, 4%
A 3-year TIPs bond has a real yield of 3% and a price of $100. Assume CPI for the next 3 years is 2%, 4% and 3%. Assuming annual coupon flows, what are the cash flows for the next years. What is the irr of this security?
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Risk Sensitive Investment Management
Authors: Mark H A Davis, Sébastien Lleo
1st Edition
9814578037, 978-9814578035
