Last year,you purchased a "TIPS" at par.Since that time,both market interest rates and the inflation rate have increased by 0.25 percent.Your bond has most likely done which one of the following since last year?

Question

Quizplus · Accepted Answer

TIPS (Treasury Inflation-Protected Securities) are designed to protect investors from inflation, as they adjust the principal value of the bond to reflect changes in the inflation rate, ensuring a fixed real rate of return. Therefore, despite changes in market interest rates and inflation, the real rate of return for TIPS remains constant.

Last Year,you Purchased a "TIPS" at Par