Calculate inflation adjustment to the principal

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Suppose you purchased 100 000 par value TIPS. Coupon rate is 1.8% and it is paid semiannually. At the end of 6 month period, CPI is 1.9%

a. Calculate inflation adjustment to the principal at the end of 6 months

b. Calculate adjusted principal at the end of 6 months

c. The coupon payment made to you at the end of six months

At the end of next 6 month period, CPI is now 2.0%

d. Calculate inflation adjustment to the principal at the end of 6 months

e. Calculate adjusted principal at the end of 6 months

f. The coupon payment made to you at the end of six months.

Show calculations in excel.

Reference no: EM133064995

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