Treasury inflation protection bonds pay:

Would it be A?

Yes.

Treasury Inflation-Protected Securities (TIPS) pay a fixed interest rate that exceeds the rate of inflation.

To arrive at this answer, let's break down the options:

1. Fixed interest plus an adjustment for inflation: This option is partially correct as TIPS do pay a fixed interest rate. However, the adjustment for inflation is not separate but is incorporated into the fixed interest rate.

2. A return that exceeds twice the inflation rate: TIPS do not provide a return that exceeds twice the inflation rate. They are designed to provide a return that keeps pace with inflation, not to exceed it.

3. Fixed interest that exceeds the rate of inflation: This option is the correct answer. TIPS are specifically designed to protect investors from inflation by providing a fixed interest rate that exceeds the rate of inflation. The principal value of TIPS also adjusts with inflation, ensuring that investors maintain their purchasing power.

4. A rate that combines the unemployment and inflation indices: TIPS are not directly tied to either the unemployment or inflation indices. They are primarily focused on protecting against inflation by adjusting the principal value and paying a fixed interest rate.

Therefore, the correct option is that TIPS pay a fixed interest that exceeds the rate of inflation.