Which of the Following Statements Correctly Apply to TIPS

question 20

Multiple Choice

Which of the following statements correctly apply to TIPS?
I.They are quoted as a percentage of the current accrued principal.
II.They pay a variable interest rate that responds to movements in the inflation rate.
III.They are backed by the full faith and credit of the U.S.government.
IV.They adjust for inflation on an annual basis.

• A) I and III only
• B) II and IV only
• C) III and IV only
• D) I, II, and III only
• E) II, III, and IV only

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Definitions:

Creditors

Individuals or institutions that lend money or extend credit and are owed money by debtors.

Credit Request

An application for borrowing money or obtaining goods or services with the promise to pay back at a later time.

Notification Days

The specified period within certain agreements or regulations where parties are required to notify others about certain conditions, changes, or events within a set timeframe.

Truth In Lending Act

A U.S. federal law designed to promote informed use of consumer credit by requiring disclosures about its terms and cost.