A 4.15 percent TIPS has an original reference CPI of 182.1. If the current CPI is 188.3, what is the par value of the TIPS?
A) $1,034.05
B) $1,004.75
C) $1,000.00
D) $967.07

Question

Quizplus · Accepted Answer

The par value of TIPS adjusts based on the change in the Consumer Price Index (CPI). The adjustment is calculated as (Current CPI / Original CPI) * Original Par Value. Assuming the original par value is $1,000 (as is standard unless otherwise specified), the calculation is (188.3 / 182.1) * $1,000 = $1,034.05.

A 415 Percent TIPS Has an Original Reference CPI of 182