Q592
Indexed bonds that are issued by linking payments to inflation are classified as
A.
treasury inflation protected securities
AnswerB.
premium protected securities
C.
risk protected securities
D.
liquidity protected securities
Answer: Option A
Solution
Answer: Option A
Solution:
Indexed bonds that are issued by linking payments to inflation are classified as treasury inflation protected securities. Treasury Inflation-Protected Securities (TIPS) are a form of U.S. Treasury bond designed to help investors protect against inflation. These bonds are indexed to inflation, have U.S. government backing, and pay investors a fixed interest rate as the bond's par value adjusts with the inflation rate.