Series 7 practice questioneasyDebt Securities — US Government — I Bonds
US Series I Savings Bonds offer investors protection against:
- ADefault risk
- BInflation, through a combination of a fixed rate and an inflation-adjusted rate✓ Correct answer
- CCurrency risk
- DLiquidity risk
Explanation
Why B — Inflation, through a combination of a fixed rate and an inflation-adjusted rate
Series I Savings Bonds earn a composite interest rate consisting of a fixed rate set at purchase and a variable rate adjusted semi-annually based on changes in the CPI-U (Consumer Price Index). This structure protects the investor's purchasing power against inflation. I Bonds are non-marketable, meaning they cannot be sold in the secondary market, and they have a minimum holding period of one year.
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