Type of bond in which payments are made on basis of inflation index is classified as_____________?
Correct answer: B. Purchasing power bond
- A. Borrowed bond
- B. Purchasing power bond
- C. Surplus bond
- D. Deficit bond
Explanation
A purchasing-power bond adjusts its payments or principal according to an inflation index, helping preserve the investor's real purchasing power. The other labels are not standard bond classifications for this feature.
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