With TIPS,the security's coupon rate is changed every six months by the inflation rate as measured by the CPI.

Question

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For TIPS (Treasury Inflation-Protected Securities), it's the principal amount that is adjusted by changes in the inflation rate, as measured by the Consumer Price Index (CPI), not the coupon rate. The coupon rate remains fixed, but the interest payments vary because they are calculated based on the adjusted principal.

With TIPS,the Security's Coupon Rate Is Changed Every Six Months