Bonds, Equity and property

Question 1

If the inflation index at the base date is Q(0) and the relevent value for the time t payment is Q(t), and the c(t) is the nominal value , what is the monetary value

Answer 1

C(t) = c(t) * Q(t)/Q(0)

if there’s a lag then it’s Q(t-lag)/Q(0-lag)

where 0 is date of issue

Question 2

relationship between real yield(e), rate of inflation(j) and money yield(i)

Answer 2

vi = vj * ve

Question 3

R(t) if 0 is date of issue and t0 is date of purchase

Answer 3

R(t) = C(t) * Q(t0)/Q(t)