At the end of my previous post about TIPS, I wrote:
There are many fine details on how TIPS really work.
Just to give you a glance of how complex it really can be, Pat Morgan on the Morningstar discussion forum posted a link to the Appendix of a 400-page Federal Regulations, with these monster definitions and formula on page 404:
Oh boy! Fortunately we have computers for this kind of stuff. I made a spreadsheet for the calculation.
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sewall says
What is puzzling about the above is that the price is set at auction. So what is being calculated here? Who uses this calculation and for what purpose? How do auction prices deviate from this calculated price and why?
(I haven’t yet read all the articles to which this post links. If the answers are there, I’ll find them in due course.)