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And index linked bond is bond that would pay you coupon that would be usually linked to some fixed underlying index that would usually be the consumer price index. These bonds should not only be judged based on their return but also they should be judged on how much they can be made use of with the diversity and portfolio. Also they should be given special importance to how these bonds can be used to earn consistent monthly income. This is very important while choosing to invest in a bond. These should be thoroughly researched by the investor before hand.