Which of the Following Is Not a Correct Statement

question 33

Multiple Choice

Which of the following is not a correct statement?

• A) Treasury inflation-protected securities have fixed coupon rates.
• B) The federal government adjusts the par value of Treasury inflation-protected securities at the rate of inflation.
• C) At maturity, an investor in Treasury inflation-protected securities receives an inflation-adjusted principal amount.
• D) All of these choices are correct.

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Definitions:

Call Option

A financial contract that gives the holder the right, but not the obligation, to buy a specified amount of an underlying asset at a set price within a specified period.

Writer

In the context of options, the writer is the seller who grants the right to the buyer in exchange for a premium, assuming the risk that the asset may have to be delivered under the contract terms.

Premium

The amount by which the price of something, such as a security or insurance policy, exceeds its face value or principal.

European Call Option

A financial contract that gives the buyer the right, but not the obligation, to buy an asset at a specified price on a specified date.