________ are marketable securities whose principal is adjusted by changes in the consumer price index to protect them against inflation; as such,their principal increases with inflation or decreases with deflation.

Question

Quizplus · Accepted Answer

TIPS stands for Treasury Inflation-Protected Securities, which are specifically designed to protect investors from inflation. The principal value of TIPS is adjusted based on changes in the Consumer Price Index (CPI), which means that if inflation increases, the value of the principal will also increase, and if deflation occurs, the value of the principal will decrease. Therefore, TIPS are ideal for those investors who want to hedge against inflation and also want a fixed income stream.

________ Are Marketable Securities Whose Principal Is Adjusted by Changes