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TIPS Capital Return Consider a 3

Question 25

Multiple Choice

TIPS Capital Return Consider a 3.75% TIPS with an issue CPI reference of 183.5. At the beginning of this year, the CPI was 190.6 and was at 199.4 at the end of the year. What was the capital gain of the TIPS in percentage terms? (Assume semi-annual interest payments and $1,000 par value.)


A) 3.75%
B) 4.62%
C) 7.10%
D) 8.80%

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