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Problem:

Reconsider a 4.50% TIPS that was issued with CPI reference of 185.6. The bond is purchased at the beginning of the year (after the interest payment), when the CPI was 196.7. For the interest in the middle of the year, the CPI was 197.6. Now, at the end of the year, the CPI is 201.9 and the interest payment has been made.

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Question: What is the total return of the TIPS in percentage terms for the year?

Note: Provide specific examples to support your answers.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91167921

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