Principal value of TIPS is increased or decreased and is based on measure of

A. consumer price index

B. manufacturing price index

C. auction selling index

D. inflation payment index

Answer: Option A

Solution(By Examveda Team)

Principal value of TIPS is increased or decreased and is based on measure of consumer price index. The Consumer Price Index (CPI) is a measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care. It is calculated by taking price changes for each item in the predetermined basket of goods and averaging them.