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The process of selling a bond's coupons and principal separately is called stripping.

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True

False

True. Stripping involves separating the two from each other.

Inflation is the continuous rise of prices over time.

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True

False

True. When we speak of the rising of prices, we call it "inflation."

Issuing inflation-adjusted securities reduces the interest costs of the US Treasury department.

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True

False

True. The Treasury department saves on interest costs in this way.

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

False

True. A bond's reference CPI-U is actually the CPI from three months prior to the bond's issue date.

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.

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