A fixed interest rate bond provides greater protection from inflation to the bond investor rather than a variable rate bond.

Name: A fixed interest rate bond provides greater protection from inflation to the bond investor rather than a variable rate bond.
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Question

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A fixed interest rate bond does not adjust for inflation, so if inflation rises, the real value of the interest payments decreases. A variable rate bond can adjust its interest payments with inflation, offering better protection.

A Fixed Interest Rate Bond Provides Greater Protection from Inflation