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asambeis [7]
3 years ago
11

Consider a 2.75 percent TIPS with an issue CPI reference of 184.2. At the beginning of this year, the CPI was 195.4 and was at 2

00.5 at the end of the year. What was the capital gain of the TIPS in dollars?
Business
1 answer:
Vikki [24]3 years ago
3 0

Answer:

The capital gain of the TIPS in dollars is $27.69

Explanation:

Given

CPI = 200.5 (Beginning of the Year)

CPI = 195.4 (End of the year)

% = 2.75

CPI Reference = 184.2

CPI Reference of 184.2 = $1,000 rate

Capital Gain is calculated by the difference in value at the end of the year value and at the beginning of the year.

End of the year value = 200.5/184.2 * ($1000)

End of the year value = $1088.49

Beginning of the year value =

= 195.4/184.2 * ($1,000)

Beginning of the year value = $1060.80

Capital Gain =$1,088.49 - $1,060.80

Capital Gain = $27.69

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