Inflation-indexed Treasury securities provide returns through:
A)interest payments, plus a conversion privilege.
B)interest payments, plus an increase in value due to inflation.
C)tax-exempt interest payments.
D)cumulative interest payments.

Question

Quizplus · Accepted Answer

The investor receives two forms of return as a result of owning the security. The first is annual interest that is paid out semiannually, and the second is an automatic increase in the initial value of principal to account for inflation.

Inflation-Indexed Treasury Securities Provide Returns Through