Treasury Inflation-Protected Securities (TIPS)

question 5

Multiple Choice

Treasury Inflation-Protected Securities (TIPS)

• A) pay a fixed interest rate for life.
• B) pay a variable interest rate that is indexed to inflation.
• C) provide a constant stream of income in real (inflation-adjusted)dollars.
• D) have their principal adjusted in proportion to the Consumer Price Index.
• E) provide a constant stream of income in real (inflation-adjusted)dollars and have their principal adjusted in proportion to the Consumer Price Index.

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