Question

In 1996 the U.S. government began offering indexed bonds, called TIPS. What sort of person would...

In 1996 the U.S. government began offering indexed bonds, called TIPS. What sort of person would want to buy a TIP?

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A saver who was concerned about future inflation reducing the real interest paid by bonds.

A business investor concerned that future inflation will increase the interest rate paid on loans.

A younger saver interested in a higher average return on investment.

An older retiree worried about deflation reducing the face value of his bonds.

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Answer #1

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A saver who was concerned about the future inflation reducing the real interest paid by bonds in the market.

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