Treasury notes that provide returns tied to inflation rate are classified as
A. clean price bonds
B. discount index bonds
C. premium index bonds
D. inflation index bonds
Answer: Option D
Solution (By Examveda Team)
Treasury notes that provide returns tied to inflation rate are classified as inflation index bonds. Inflation Indexed Bond (IIB) is a bond issued by the Sovereign, which provides the investor a constant return irrespective of the level of inflation in the economy. The main objective of Inflation Indexed Bonds is to provide a hedge and to safeguard the investor against macroeconomic risks in an economy.This Question Belongs to Management >> International Finance And Treasury
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