That interest rate on TIPS remains the same for the term of the security while the principal is
adjusted to reflect the current CPI.

Question

That interest rate on TIPS remains the same for the term of the security while the principal is
 adjusted to reflect the current CPI.

Quizplus · Accepted Answer

TIPS, or Treasury Inflation-Protected Securities, have a fixed interest rate for the life of the bond, but their principal value is adjusted semi-annually based on changes in the Consumer Price Index (CPI), which reflects inflation or deflation.

That Interest Rate on TIPS Remains the Same for the Term