Series 7 Exam Question 269: Answer and Explanation

Question: 269

The initial maturity for Treasury Inflation Protected Securities is

• A. 2, 3, 5, 7, and 10 years
• B. 10 to 30 years
• C. 6 months to 30 years
• D. 5, 10, and 30 years

Correct Answer: D

Explanation:

D. Treasury Inflation Protected Securities (TIPS) are U.S. government bonds that pay interest payments once every 6 months. The interest payments adjust according to prevailing interest rates, which means that the bond price remains more stable. TIPS have initial maturities of 5, 10, and 30 years.