Solved

The US Treasury Issues Bonds Where the Return Is Indexed to to the Consumer

Question 86

Multiple Choice

The U.S. Treasury issues bonds where the return is indexed to the consumer price index. We should expect that these bonds, relative to other U.S. Treasury bonds, will have:


A) lower price and lower return due to the decreased risk.
B) lower price and a lower fixed return since the demand for them should be higher.
C) higher price and higher fixed return since we always seem to have some inflation.
D) higher price and lower return due to the decreased risk from inflation in holding these bonds.

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Unlock this Answer For Free Now!

View this answer and more for free by performing one of the following actions

qr-code

Scan the QR code to install the App and get 2 free unlocks

upload documents

Unlock quizzes for free by uploading documents