Identifying Inflation-Protected Bonds

Fixed income securities offer a range of bond types, each serving unique purposes in the investment landscape. Among these, certain bonds are specifically designed to provide protection against inflation. One such bond type adjusts its principal amount based on inflationary changes, allowing investors to preserve purchasing power over time.

Consider the following statements regarding various types of bonds:

1. A bond issued by the U.S. Treasury that provides interest payments adjusted for inflation.

2. A bond issued by a corporation that guarantees a fixed return but is not indexed for inflation.

3. A state-issued bond that provides interest payments that rise with inflation, without any underlying government backing.

Which of the following statements describes a type of bond that offers inflation protection?