SIE practice questioneasyTreasury Securities - TIPS
What protection do Treasury Inflation-Protected Securities (TIPS) offer investors?
- ACurrency exchange protection
- BFixed principal, variable interest rates
- CTax-free interest payments
- DInflation protection through principal adjustment✓ Correct answer
Explanation
Why D — Inflation protection through principal adjustment
TIPS adjust principal based on inflation, protecting purchasing power. Interest is taxable, and they do not offer currency protection.
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