Which of the Following Statements Is Not True About Treasury

question 96

Multiple Choice

Which of the following statements is not true about Treasury Inflation-Protected Securities (TIPS) ?

• A) They are currently sold with 5-, 10-, and 30-year maturities.
• B) The amount of principal increases with inflation and decreases with deflation.
• C) They pay interest twice a year, at a fixed rate.
• D) They can be held until maturity or sold before maturity.
• E) Interest income and growth in principal are exempt from federal income tax.

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Definitions:

Common-value Auction

An auction type where the item for sale is of the same value to all bidders, but that value is uncertain.

Aggressive Bidding

a strategy in auctions or competitive procurement where participants bid very high or low to secure a contract or item, often taking substantial risks.

Auctioneer

A person or entity responsible for conducting auctions, overseeing the bidding process, and finalizing the sale of items.

Winner's Curse

A phenomenon in auctions where the winner tends to overpay due to incomplete information or overly optimistic value assessments.