Floating-rate bonds pay interest based on an inflation index, such as the consumer price index (CPI).

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Floating-rate bonds pay interest based on a benchmark rate plus a spread, not based on an inflation index such as the consumer price index (CPI). Inflation-indexed bonds, also known as Treasury Inflation-Protected Securities (TIPS), are designed to provide protection against inflation by adjusting the principal amount and interest payments based on changes in the CPI.

Floating-Rate Bonds Pay Interest Based on an Inflation Index, Such