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Suppose a portfolio manager purchases 1mio USD of par value TIPS. The coupon rate determined at the auction is 3,2%.a.Assume that the end of six
Suppose a portfolio manager purchases 1mio USD of par value TIPS. The coupon rate determined at the auction is 3,2%.a.Assume that the end of six months the CPI is 3,6% (annual rate)b. Compute the inflation adjustment to principal at the end of 6 months.c.Compute the inflation-adjusted principal at the end of 6 monthsd. The coupon payment made to the investor at the end of six months.
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