If a bond investor wishes to guarantee the coupon interest they receive and be compensated for the effects of inflation,they may look to buy:

Question

Quizplus · Accepted Answer

A capital-indexed bond is designed to protect against inflation by adjusting its payments according to changes in an inflation index, while still providing a fixed coupon interest rate. Treasury notes and bonds are also considered relatively low risk, but they do not have built-in inflation protection. Corporate bonds carry higher risk and may not offer inflation protection or a guaranteed coupon interest rate.

If a Bond Investor Wishes to Guarantee the Coupon Interest