TIPS Capital Return Consider a 2.25% TIPS with an issue CPI reference of 183.5. At the beginning of this year, the CPI was 197.1 and was at 203.8 at the end of the year. What was the capital gain of the TIPS in dollars and in percentage terms?

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2.17K viewsOctober 22, 2016

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Darshita 6.14K October 22, 2016 0 Comments

TIPS Capital Return Consider a 2.25% TIPS with an issue CPI reference of 183.5. At the beginning of this year, the CPI was 197.1 and was at 203.8 at the end of the year. What was the capital gain of the TIPS in dollars and in percentage terms?

1 Answer

score 0 · Answer 1 · 2016-10-22T11:19:54+00:00

gain = end of year value – beginning of year value =

203.8/183.5 × $1,000 − 197.1/183.5 × $1,000 = $1,110.63 − $1,074.11 = $36.52

As a percentage, the gain was = $36.52 ÷ $1,074.11 = 3.40%

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