Which of the Following Statements About Treasury Inflation-Indexed Bonds Is

question 36

Multiple Choice

Which of the following statements about Treasury inflation-indexed bonds is not true?

• A) The principal amount used to compute the interest payment varies with the consumer price index.
• B) The interest payment rises when inflation occurs.
• C) The interest rate rises when inflation occurs.
• D) At maturity, the securities pay the greater of face value or inflation-adjusted principal.

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