Index Ratio and Adjusted Principal: How the Principal Grows
This lesson is part of the course
In this lesson
You divide the reference index on six dates by the base index, round the index ratio, grow the principal with it and turn the total uplift into an average yearly inflation rate.
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Lessons in this course
- Price Indices and Lags: The Reference Index for Any Date Locked
- Index Ratio and Adjusted Principal: How the Principal Grows Locked
- Coupons: Real Coupon × Adjusted Principal Locked
- Real Yield and Price: Discounting Real Cash Flows Locked
- Breakeven Inflation: Nominal vs Inflation-Linked Locked
- Deflation Floors: Getting at Least Par Back Locked
- Inflation Scenarios: Linker vs Nominal Bond Returns Locked
- Portfolio View: Real vs Nominal Income and Inflation Sensitivity Locked