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Consider a 3.25 percent TIPS with an issue CPI reference of 186.7. At the beginning of this year, the CPI was 197.5 and was at 202.4 at the end of the year. What was the capital gain of the TIPS in dollars? (Assume semi-annual interest payments and $1,000 par value.)
Significance Level
The threshold under which the p-value falls to reject the null hypothesis, typically set at 0.05 or 5%.
Critical Value
A threshold in a statistical test that defines the boundary between where a statistical hypothesis would be considered significantly different or not.
Null Hypothesis
A default hypothesis that there is no significant difference or effect, to be tested against the alternative hypothesis.
Test Statistic
A value, derived from sample data, used in hypothesis testing to determine whether to reject the null hypothesis.
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