Last Year,you Purchased a "TIPS" at Par

question 77

Multiple Choice

Last year,you purchased a "TIPS" at par.Since that time,both market interest rates and the inflation rate have increased by 0.25 percent.Your bond has most likely done which one of the following since last year?

• A)decreased in value due to the change in inflation rates
• B)experienced an increase in its bond rating
• C)maintained a fixed real rate of return
• D)increased in value in response to the change in market rates
• E)increased in value due to a decrease in time to maturity

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Definitions:

Distribution Center

A facility where goods are received, stored, and then distributed to consumers or retail outlets.

New Store

A newly established retail outlet or branch of a business that has recently started operations.

Financial Management

The practice of managing a firm's financial operations to achieve financial goals and profitability.

CFO

Chief Financial Officer, the senior executive responsible for managing the financial actions of a company.