Explain Why Bond Investors May Be Interested in TIPS Rather

question 69

Essay

Explain why bond investors may be interested in TIPS rather than traditional bonds. Why have TIPS not been popular lately?

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Definitions:

Consideration

Something of value exchanged between parties in a contract, which is necessary for the agreement to be legally binding.

Promised

Something assured by one party to another, often relating to an action, service, or condition that will take place in the future.

Invitation To Treat

An offer to negotiate or an expression of willingness to discuss a potential contract.

Offer

A proposal by one party to enter into a contract, subject to acceptable terms by another party.