Question

What additional information would be needed to compute which of the following Treasury bonds will pay the highest real yield?

Bond Type Principal Coupon Time To Maturity Selling price of the Bond
TIPS $15,000 2.2% 12 years $15,000
Fixed-Rate $30,000 4.2% 16 years $30,000
Zero Coupon $25,000 0% 15 years $20,000



Select the best answer from the choices provided.
how index rates will perform
what inflation will be
the ratings of the bonds
how the bonds will be taxed

Answer 1

@jim_thompson5910

Answer 2

@jim_thompson5910

Answer 3

@jim_thompson5910

Answer 4

@jim_thompson5910

Answer 5

@jim_thompson5910

Answer 6

This page explains that inflation is very important to calculating bond real yields

http://bonds.about.com/od/bonds101/a/What-Is-Real-Return-And-Real-Yield.htm

Answer 7

So you need to know the rate of inflation

Answer 8

@jim_thompson5910 the answer would be b>

Answer 9

yes

Answer 10

@jim_thompson5910 Thank you mate

Answer 11

np