A bond whose principal moves with the price index
The principal tracks consumer prices and the coupon is paid on that adjusted amount, so rising prices do not eat away at what the bond is really worth. When prices fall the principal shrinks too, which is why it is not always the better choice.
A $1,000 bond is treated as $1,030 after prices rise 3%.
For learning, not investment advice. Decisions are your own.
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