Suppose an investor purchases $10,000 of par value of a TIPS. The real estate (determined at the auction) is 3.8% Assume that at the end of the first six months the CPI-U is 2.4% (annual rate) and at the end of the second six months the CPI-U is 2.8% (annual rate).

i) Compute the inflation-adjusted principal at the end of the first six months.

ii) the coupon payment made to the investor at the end of the first six months

iii) the inflation-adjusted principal at eh end of the second six months

iv) the coupon payment made to the investor at the end of the second six months