TIPS are a Treasury offering that protects investors from unexpected increases in inflation.

Question

Quizplus · Accepted Answer

TIPS (Treasury Inflation-Protected Securities) are designed to provide a hedge against inflation by adjusting the principal value of the bond based on changes in the Consumer Price Index (CPI). This means that as inflation increases, the principal value of the TIPS bond also increases, providing investors with protection against unexpected inflation.

TIPS Are a Treasury Offering That Protects Investors from Unexpected