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TIPS
Maturity	Coupon	Bid	Asked	Chg	Yield*	Accrued Principal
1/15/2024	0.625	108.01	108.03	-1	-1.992	1115
1/15/2026	2.000	119.15	119.18	+5	-1.742	1311

Treasury Notes & Bonds
Maturity	Coupon	Bid	Asked	Chg	Asked Yield
1/15/2024	0.125	99.2560	99.2620	0.0120	0.185
1/31/2026	2.625	110.2540	110.2600	-0.0020	0.448

6. Complete the following two tables using the information in the two tables above.

Security	Maturity	YTM (%)	=	Real rate of return (%)	+	Implied inflation rate in the market (%)
3 Years (very rare to get this scenario with identical maturities and exactly three years out)
Treasury note/bond	1/15/2024		=		+
TIPS	1/15/2024		=		+
~ 5 Years (very common to get slightly different maturities and not exactly five years out)
Treasury note/bond	1/31/2026		=		+
TIPS	1/15/2026		=		+

Assume Bill believes with 100% certainty that the inflation rate will be 2.000% over the next 5 years. If Bill wants a 5-year investment, should he buy the Treasury note/bond or TIPS?
Assume Hillary believes with 100% certainty that the inflation rate will be 0.500% over the next 5 years. If Hillary wants a 5-year investment, should he buy the Treasury note/bond or TIPS?
Assume Barack believes with 100% certainty that the inflation rate will be 0.000% over the next 5 years. If Barack wants a 5-year investment, should he buy the Treasury note/bond or TIPS?

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