End-of-Chapter Exercise 7 The US Treasures some of the ver t y What can you come used for W in over the tool the debt instrument TIPS bonds are traded on a much allen an romina US Treasury bonds of Treasury haion Protected Securities. TIPS, in which the price of bond is out the liquidity premium between TIPS and nominal bonds? .. bonds * The herence in the premium between I ndominal Usbonds waren OD. The ty premium for a TIPS bond is high, so it is more per Man aroma bond of her yield on om mounty I Quito Help The U.S. T ryaters some of its debtas Teration Procedures which the price of ba many What can you condute about the premium between TIPS and nominal US Bonds? d for win over the f u n. TP bondare traded on the c on s truy bonds of OAB TIPS and nominal 8. bonis quali so res no liquidity premium OB. The laty premium for TPS bond is usually smaller than to compensation is no u s body of The ference in the liquidity premium b en TIPS and U.S. bonds wa s in a higher yield on to OD. The premium for TIP bonds so it is more than a Roma Stond of coal matury maturity us bonds 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? O A. Both TIPS and nominal U.S. bonds are equally liquid, so there is no liquidity premium. OB. The liquidity premium for a TIPS bond is usually smaller than inflation compensation in nominal U.S. bond yields of equal maturity O C. The difference in the liquidity premium between TIPS and nominal U.S. bonds usually results in a higher yield on nominal U.S. bonds. OD. The liquidity premium for a TIPS bond is high, so it is more profitable than a nominal U.S. bond of equal maturity