问题详情

An investor is considering floating-rate debt and other investments to protect against unexpected increases in inflation. Her friend states: 1) Treasury Inflation Protected Securities (TIPS) is suitable because the coupon rate is adjusted for inflation semiannually. 2) On-the-run Treasury issues have narrower bid-ask spreads than other Treasury issues.
A. Only statement 1 is correct.
B. Only statement 2 is correct.
C. Both statement 1 and 2 are correct.