You have invested in a Treasury Inflation Protected Security (TIPS) that has a par value of...
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You have invested in a Treasury Inflation Protected Security (TIPS) that has a par value of $1,000 and a coupon rate of 3.07%. You paid par value for the security, and it matures in two years. Assume that the inflation rate for next year is 3.45% and for the year after is 2.03%. Required: Complete the following table by calculating the par values, the coupon payments, the principal repayment, the total payments, and the nominal and real rates of return for the next two years. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Time 0 1 2 Inflation in Year Just Ended Par Value S 1,000.00 3.45% S 1,000.00 $ 2.03% $ 1,000.00 $ Coupon Payment 30.70 $ 30.70 $ Principal Repayment 1,055.50 $ 1,055.50 $ Total Payment 1,086.20 1,116.90 Nominal Return 3.07 % 8.62 % Real Return 2.97 % 5.00 % You have invested in a Treasury Inflation Protected Security (TIPS) that has a par value of $1,000 and a coupon rate of 3.07%. You paid par value for the security, and it matures in two years. Assume that the inflation rate for next year is 3.45% and for the year after is 2.03%. Required: Complete the following table by calculating the par values, the coupon payments, the principal repayment, the total payments, and the nominal and real rates of return for the next two years. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Time 0 1 2 Inflation in Year Just Ended Par Value S 1,000.00 3.45% S 1,000.00 $ 2.03% $ 1,000.00 $ Coupon Payment 30.70 $ 30.70 $ Principal Repayment 1,055.50 $ 1,055.50 $ Total Payment 1,086.20 1,116.90 Nominal Return 3.07 % 8.62 % Real Return 2.97 % 5.00 %
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A 1 B C D E F G H I J K L M 2 Time Inflation in Year Just Ended Par Value Coupon Payment ... View the full answer
Related Book For
Data Analysis and Decision Making
ISBN: 978-0538476126
4th edition
Authors: Christian Albright, Wayne Winston, Christopher Zappe
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