A security which was created by the United States Treasury department to protect against inflation risk is called:
A)CMO.
B)FNMA.
C)GNMA.
D)TIPS.
E)CD.

Question

Quizplus · Accepted Answer

TIPS stands for Treasury Inflation-Protected Securities, which were created by the United States Treasury Department to provide protection against inflation risk. The principal value of TIPS increases with inflation, which means that investors are protected against inflationary pressures. Thus, TIPS are a popular investment for investors who seek protection against inflation risk.

A Security Which Was Created by the United States Treasury