Home > Income > Intermediate
Income Intermediate: 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.
You don't have to pay state income taxes on interest earned from Treasury inflation-adjusted securities.
Choose wisely. There is only one correct answer.
True. You are exempt from state income taxes on interest earned from Treasury inflation-adjusted securities.
2.
A bond's reference CPI-U is actually the CPI from three months prior to the bond's issue date.
Choose wisely. There is only one correct answer.
True. A bond's reference CPI-U is actually the CPI from three months prior to the bond's issue date.
3.
The process of selling a bond's coupons and principal separately is called stripping.
Choose wisely. There is only one correct answer.
True. Stripping involves separating the two from each other.
4.
Par value measures the effects of inflation.
Choose wisely. There is only one correct answer.
False. The CPI-U measures the effects of inflation.
5.
The main advantage of inflation-adjusted securities is _______.
Choose wisely. There is only one correct answer.
They offer an investment that maintains its purchasing power. They manage this by paying interest rates that stay ahead of inflation.