Income Intermediate: Treasury Inflation-Adjusted Securities

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1.
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.
2.
The time when a bond pays you back your principal is called its _______.
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Maturity. The maturity is the date on which you get your principal back.
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.
You don't have to pay state income taxes on interest earned from Treasury inflation-adjusted securities.
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True. You are exempt from state income taxes on interest earned from Treasury inflation-adjusted securities.
5.
The process of selling a bond's coupons and principal separately is called stripping.
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True. Stripping involves separating the two from each other.