If inflation is higher than that expected at time of issue,inflation-indexed Treasury securities

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Quizplus · Accepted Answer

Inflation-indexed Treasury securities are designed to provide a higher return than fixed income securities in times of higher inflation. This is because the principal and interest payments are adjusted for inflation, which means the investor's return is protected against inflation. Therefore, the investor is effectively compensated for the loss of purchasing power caused by inflation.

If Inflation Is Higher Than That Expected at Time of Issue,inflation-Indexed