Business, 07.10.2019 21:30 djdjdosoe6504

The u. s. treasury offers some of its debt as treasury inflation protected securities, or tips, in which the price of bonds is adjusted for inflation over the life of the debt instrument. tips bonds are traded on a much smaller scale than nominal u. s. treasury bonds of equivalent maturity. what can you conclude about the liquidity premium between tips and nominal u. s. bonds? a. the liquidity premium for a tips bond is high, so it is more profitable than a nominal u. s. bond of equal maturity. b. both tips and nominal u. s. bonds are equally liquid, so there is no liquidity premium. c. the liquidity premium for a tips bond is usually smaller than inflation compensation in nominal u. s. bond yields of equal maturity. d. the difference in the liquidity premium between tips and nominal u. s. bonds usually results in a higher yield on nominal u. s. bonds.

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The u. s. treasury offers some of its debt as treasury inflation protected securities, or tips, in w...

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