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Treasury inflation-adjusted securities come in maturities of five or 10 years.

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True

False

True. Maturities are for five or 10 years.

You don't have to pay state income taxes on interest earned from Treasury inflation-adjusted securities.

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True

False

True. You are exempt from state income taxes on interest earned from Treasury inflation-adjusted securities.

The principal of an inflation-adjusted bond is always guaranteed to its investor.

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True

False

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.

Par value measures the effects of inflation.

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True

False

False. The CPI-U measures the effects of inflation.

Only the principal of an inflation-adjusted bond is adjusted for inflation.

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True

False

False. Semi-annual interest payments (not the interest rate) will also adjust for inflation as the principal adjusts.

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