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Income Intermediate: Treasury Inflation-Adjusted Securities

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1.
Treasury inflation-adjusted securities come in maturities of five or 10 years.
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True. Maturities are for five or 10 years.
2.
Issuing inflation-adjusted securities reduces the interest costs of the US Treasury department.
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True. The Treasury department saves on interest costs in this way.
3.
A bond's principal will lose its purchasing power over time unless it is adjusted for inflation.
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True. That is why some bonds adjust their interest rates to stay ahead of inflation.
4.
Phantom income is taxable income on an inflation-adjusted bond's coupon interest.
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False. Phantom income refers to taxable income on an inflation-adjusted bond's principal interest.
5.
Inflation is the continuous rise of prices over time.
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True. When we speak of the rising of prices, we call it "inflation."