Treasury Inflation$-$Protected Securities $($TIPS$)$

Question $12$ Answer

a$.$

provide a constant stream of income in real $($inflation$-$adjusted$)$ dollars.

b$.$

have their principal adjusted in proportion to the Consumer Price Index.

c$.$

pay a fixed interest rate for life.

d$.$

pay a variable interest rate that is indexed to inflation, but maintain a constant principal.

e$.$

provide a constant stream of income in real $($inflation$-$adjusted$)$ dollars and have their principal adjusted in proportion to the Consumer Price Index.