The world’s Largest Sharp Brain Virtual Experts Marketplace Just a click Away
Levels Tought:
Elementary,Middle School,High School,College,University,PHD
| Teaching Since: | May 2017 |
| Last Sign in: | 398 Weeks Ago, 5 Days Ago |
| Questions Answered: | 66690 |
| Tutorials Posted: | 66688 |
MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
|
Consider a newly issued TIPS bond with a 3-year maturity, par value of $1,000, and coupon rate of 4.00%. Assume annual coupon payments. |
| Time | Inflation in Year Just Ended |
Par Value | Coupon Payment |
+ | Principal Repayment |
= | Total Payment |
||||||||||
| Â Â 0 | Â | Â | Â | $ | 1,000.00 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
| Â Â 1 | Â | 2.0 | % | $ | 1,020.00 | Â | $ | 40.80 | Â | Â | Â | 0 | Â | Â | $ | 40.80 | Â |
| Â Â 2 | Â | 1.0 | % | $ | 1,030.20 | Â | $ | 41.21 | Â | Â | Â | 0 | Â | Â | $ | 41.21 | Â |
| Â Â 3 | Â | 3.0 | % | $ | 1,061.11 | Â | $ | 42.44 | Â | Â | $ | 1,061.11 | Â | Â | $ | 1,103.55 | Â |
| Â | |||||||||||||||||
What is the nominal rate of return on the TIPS bond in the first year?
| Â | 3.00% |
| Â | 4.08% |
| Â | 6.08% |
| Â | 6.00% |
Hel-----------lo -----------Sir-----------/Ma-----------dam----------- Â----------- Th-----------ank----------- Yo-----------u f-----------or -----------usi-----------ng -----------our----------- we-----------bsi-----------te -----------and----------- ac-----------qui-----------sit-----------ion----------- of----------- my----------- po-----------ste-----------d s-----------olu-----------tio-----------n. -----------Ple-----------ase----------- pi-----------ng -----------me -----------on -----------cha-----------t I----------- am----------- on-----------lin-----------e o-----------r i-----------nbo-----------x m-----------e a----------- me-----------ssa-----------ge -----------I w-----------ill-----------