Final answer:
An index is not related to fixed payments at fixed interest rates; rather, it involves payments that are adjusted for inflation. Indexed bonds are an example, protecting against inflation by promising a real rate of return above the inflation rate.
Step-by-step explanation:
The statement provided by the student is false. An index is not a series of fixed payments made at the end of each of a fixed number of periods at a fixed interest rate. Instead, a payment that is indexed is one that is automatically adjusted for inflation. Indexed bonds, for example, promise to pay a certain real rate of interest above whatever inflation rate occurs, providing protection against inflation for investors such as retirees planning for the long term. This indexing can be found in various financial instruments and government programs including Social Security payments and tax brackets.