Choose wisely. There is only one correct answer to each question.
0%
Keep studying!
Review your answers below to learn more.
1.
Treasury inflation-protected securities are backed by _______.
The US government. That adds an element of safety to inflation-conscious investors.
2.
Are stocks in general an indirect way to protect your portfolio from inflation?
Yes, because stocks have the potential for higher returns than bonds, and inflation will take a smaller bite, in percentage terms, out of your future purchasing power. Because of this, stocks have traditionally been used for inflation protection.
3.
If you want to add commodities to your portfolio to hedge against inflation, a good rule of thumb is to limit them to _______.
5-6%. Because they can be volatile, consider keeping them limited, especially if you are retired.
4.
Stocks are an indirect way to protect your portfolio against the threat of inflation.
True. Stocks have the potential for higher returns than bonds, and inflation will take a smaller bite, in percentage terms, out of your future purchasing power.
5.
TIPS bonds _______ are regularly adjusted to reflect changes in inflation.
Principal values. The principal values are adjusted as needed; this, in turn, will affect the interest payments that are made.