SIE Exam Practice Question 989
Question: 989
Which of the following is correct regarding TIPS?
Correct Answer: A
Explanation:
With TIPS (treasury inflation-protected securities), investors are paid either the adjusted principal amount at maturity, or the original principal amount, whichever is greater. TIPS pay interest every six months, and their interest payments increase with inflation and decrease with deflation. They have maturities of 5, 10, or 30 years.
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