Inflation-protected Treasury notes have a principal value that changes in accordance with the consumer price index (CPI).

Question

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Inflation-protected Treasury notes, also known as Treasury Inflation-Protected Securities (TIPS), have a principal value that is adjusted based on changes in the CPI. This is done in order to protect investors from the effects of inflation. The interest payments on TIPS are also adjusted based on changes in the CPI.

Inflation-Protected Treasury Notes Have a Principal Value That Changes in Accordance