Help
Course Catalog > Bonds > 200
Bonds 207: Treasury Inflation-Adjusted Securities

Test your knowledge

Choose wisely. There is only one correct answer to each question.

0%
Keep studying!
Review your answers below to learn more.
1.
Phantom income is taxable income on an inflation-adjusted bond's coupon interest.
Choose wisely. There is only one correct answer.
False. Phantom income refers to taxable income on an inflation-adjusted bond's principal interest.
2.
Treasury inflation-adjusted securities come in maturities of five or 10 years.
Choose wisely. There is only one correct answer.
True. Maturities are for five or 10 years.
3.
Only the principal of an inflation-adjusted bond is adjusted for inflation.
Choose wisely. There is only one correct answer.
False. Semi-annual interest payments (not the interest rate) will also adjust for inflation as the principal adjusts.
4.
Inflation is the continuous rise of prices over time.
Choose wisely. There is only one correct answer.
True. When we speak of the rising of prices, we call it "inflation."
5.
The principal of an inflation-adjusted bond is always guaranteed to its investor.
Choose wisely. There is only one correct answer.
False. The principal of an inflation-adjusted bond is guaranteed by the full faith and credit of the US government if an investor holds onto it until its maturity.