Quote:
Originally Posted by HardDrive
Thats just it, they are not fixed rate. The rate is tied to the Consumer Price Index. So as CPI goes up during a period of inflation, your rate goes up with it. At least that is my caveman understanding of them.......
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Sorry, I wasn't clear - my last post was referring to traditional fixed rate bonds, it was a response to 74-911's post which I thought was also referring to those sorts of bonds. I guess we are kind of talking about both TIPS and fixed rate in the thread, either that or I am mis-reading things.
And just to make sure the vocabulary isn't causing any mis-understanding - by fixed rate I mean a bond that pays a coupon that is a pre-determined and unchangeable percentage of face value.