CDIPs are similar to U.S. Treasury Inflation-Protected Securities (TIPS), where the principal amount is adjusted periodically to reflect changes in inflation. CDIPs use the non-seasonally adjusted Consumer Price Index for All Urban Consumers (CPI) as a reference to measure inflation. If prices (as measured by CPI) have risen 3%, the principal amount of the investment will also increase by 3%.
How are interest payments calculated?
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