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Bonds 207: Treasury Inflation-Adjusted Securities

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1.
A bond's reference CPI-U is actually the CPI from three months prior to the bond's issue date.
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True. A bond's reference CPI-U is actually the CPI from three months prior to the bond's issue date.
2.
The process of selling a bond's coupons and principal separately is called stripping.
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True. Stripping involves separating the two from each other.
3.
The main advantage of inflation-adjusted securities is _______.
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They offer an investment that maintains its purchasing power. They manage this by paying interest rates that stay ahead of inflation.
4.
The time when a bond pays you back your principal is called its _______.
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Maturity. The maturity is the date on which you get your principal back.
5.
You don't have to pay state income taxes on interest earned from Treasury inflation-adjusted securities.
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True. You are exempt from state income taxes on interest earned from Treasury inflation-adjusted securities.