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.
Inflation is the continuous rise of prices over time.
Choose wisely. There is only one correct answer.
True. When we speak of the rising of prices, we call it "inflation."
2.
The principal of an inflation-adjusted bond is always guaranteed to its investor.
Choose wisely. There is only one correct answer.
False. The principal of an inflation-adjusted bond is guaranteed by the full faith and credit of the US government if an investor holds onto it until its maturity.
3.
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.
4.
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.
5.
Treasury inflation-adjusted securities come in maturities of five or 10 years.
Choose wisely. There is only one correct answer.
True. Maturities are for five or 10 years.