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Options
- A
The interest is fixed at the time of issue, as per the then prevailing interest rates in the economy
-
The interest is re-set periodically as per the current inflation rates
Correct answer
- C
The interest on these bonds is tax free
- D
These bonds provide negative real rate of return due to its special interest rate
Why this is the answer
Inflation-indexed bonds adjust interest rates periodically based on inflation, protecting real returns.
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