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Suppose you purchased 100 000 par value TIPS. Coupon rate is 1.8% and it is paid semiannually. At the end of 6 month period, CPI
Suppose you purchased 100 000 par value TIPS. Coupon rate is 1.8% and it is paid semiannually. At the end of 6 month period, CPI is 1.9% a. Calculate inflation adjustment to the principal at the end of 6 months b. Calculate adjusted principal at the end of 6 months c. The coupon payment made to you at the end of six months At the end of next 6 month period, CPI is now 2.0% d. Calculate inflation adjustment to the principal at the end of 6 months e. Calculate adjusted principal at the end of 6 months f. The coupon payment made to you at the end of six months. Show calculations in excel
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