Question: Consider a 4.50 percent TIPS with an issue CPI reference of 197.6. The bond is purchased at the beginning of the year (after the interest

Consider a 4.50 percent TIPS with an issue CPI reference of 197.6. The bond is purchased at the beginning of the year (after the interest payment), when the CPI was 205.5. For the interest payment in the middle of the year, the CPI was 207.1. Now, at the end of the year, the CPI is 211.6 and the interest payment has been made.

1. What is the total return of the TIPS in dollars?

2. What is the total return of the TIPS in percentage?

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