borrowed bond
purchasing power bond
surplus bond
deficit bond
✅ The correct answer is B.
Type of bond in which payments are made on basis of inflation index is classified as purchasing power bond. Purchasing power is the value of a currency expressed in terms of the amount of goods or services that one unit of money can buy. Purchasing power is important because, all else being equal, inflation decreases the amount of goods or services you would be able to purchase.
Type of bond in which payments are made on basis of inflation index is classified as purchasing power bond. Purchasing power is the value of a currency expressed in terms of the amount of goods or services that one unit of money can buy. Purchasing power is important because, all else being equal, inflation decreases the amount of goods or services you would be able to purchase.