Inflation risk

Inflation risk on bonds
If investors purchase a bond on which they can realize a coupon rate of 5% but the rate of inflation is 6%, the purchasing power of the cash flow actually has declined.

Inflation risk
Also called purchasing-power risk, the risk that changes in the real return the investor will
realize after adjusting for inflation will be negative.
Related Terms: ...

inflation risk

The risk that the return from an investment will be eroded by the negative impact of inflation on the value of a country's currency.

Inflation Risk
What does inflation have to do with the amount of investment risk you're willing to assume?

Inflation Risk:
The uncertainty that the return on investment will be low enough to result in a negative, real, after-tax rate of return; a situation described as a decrease in purchasing power.
Informal Trust: ...

Inflation risk describes the risk that increases in the prices of goods and services, and therefore the cost of living, reduce your purchasing power. Let's say a can of soda increases from $1 to $2.

Inflation risk: Sometimes referred to as 'loss of purchasing power'. Whenever the rate of inflation exceeds the earnings on your investment, you run the risk that you wll actually be able to buy less, not more.

Inflation risk:
Uncertainty over the future real (after-inflation) value of your investment.
Inflation: ...

Inflation Risk Rising prices due to inflation can erode the real value, or purchasing power, of investments. Over long periods, stock investments have beaten inflation by a larger percentage than have bond or money market investments.

Inflation Risk
Inflation risk is the risk that rising prices of goods and services over time, or, generally the cost of living, will decrease the value of the return on investments.

Inflation Risk
Inflation robs you of your money's purchasing power. As an investor, you should be wary of inflation's effect on your investment returns especially over the long term.

Inflation Risk The threat that an investment will not keep up with the pace of inflation.

inflation risk: The risk that the purchasing power of an investment, after adjusting for inflation, will be negative.
initial public offering (IPO): Securities issued by a company and initially offered for sale to the public through a broker.

INFLATION RISK The possibility that the value of assets or income will be eroded by inflation (the rising cost of goods and services). Inflation risk is often mentioned in relation to conservative fixed income funds.

Inflation Risk
The chance that the value of assets or income will be diminished as inflation shrinks the value of a currency.
International Funds / Emerging Market Funds ...

Related: inflation risk
Pure-discount bond
A bond that will make only one payment of principal and interest. Also called a zero-coupon bond or a single-payment bond.

Coping With Inflation Risk
Hamburger Economics: The Big Mac Index
Economic Indicators:Trade Balance Report
New York Futures Exchange - NYFE ...

inflation hedge An investment designed to protect against inflation risk. Such an investment's... inflation rate The rate at which prices for goods and services rise, and, subsequently, purchasing...

inflation risk The possibility that increases in the level of prices (cost of living) will reduce or eliminate the "real" returns on a particular investment. initial public offering (IPO) The first offering of stock by a company.

Methods for Dealing with Inflation Risk
This checklist defines inflation risk and looks at various tools for managing it.
Reducing Costs and Improving Efficiency by Outsourcing and Selecting Suppliers
by Paul Davies ...

Inflation risk is mitigated by building an anticipated inflation adjustment into the target cash flows - recall the 3 percent annual adjustment used in the example.

Inflation risk
Information coefficient (IC)
Information costs
Informationless trades
Information-motivated trades
Initial margin requirement
Initial Public Offering (IPO)
Input-output tables
Insider Information
Insiders ...

These risks are systematic risks, regulatory risks and inflation risks.

type of debt security is similar to regular municipal bonds, but municipal inflation-linked securities offer investors a slightly lower coupon rate because these securities are safer than debt instruments that expose the holder to inflation risk.

For example, with government of Canada treasury bills and bonds, the interest yield goes up as the time lengthens. Longer term bonds expose investors to more inflation risk and more risk that you are locking in a return that turns out to be below ...

Purchasing power risk
Related: Inflation risk
Pure discount bond
A bond that will make only one payment of principal and interest. Also called a zero-coupon bond or a single-payment bond.

And while the rate at which the interest is paid is generally less than on long-term corporate bonds, the shorter term means less inflation risk.
Treasury stock
Treasury stock is stock that an issuing company repurchases from its shareholders.

Currency ETNs - Like currency ETFs, these types of ETNs seek to track the price of a particular foreign currency, like the Euro or Yen. Currency ETNs are a good way to hedge inflation risk or gain exposure into foreign markets.

The chance that the actual return from an investment will be different from its expected return. Investment risks include economic risk, inflation risk, interest rate risk, market risk, and specific risk.

Gilt-edged Securities A term often used to refer to GOVERNMENT SECURITIES signifying that the securities have the highest degree of reliability. They are, however, vulnerable to INTEREST RATE RISK and INFLATION RISK.

interest you earn on Treasury notes is exempt from state and local, but not federal, taxes. And while the rate at which the interest is paid is generally less than on long-term corporate or Treasury bonds, the shorter term means less inflation risk.

The most important is liquidity preference, that investors need compensation for the potentially lower liquidity of long term bonds. Another explanation is that higher duration means greater exposures to interest rate risk and inflation risk.

Inflation Risk - The likelihood that the value of your investments won't keep up with the rate of inflation over the long term.

Bonds with short maturity would be linked to lower rates because of their lower risk (since life to maturity is lower). Higher rates correspond to higher maturities (uncertainty grows up because of inflation risk, etc…): investors receive a ...

The practice of isolating a designated pot of money from outside risk....(Read more)
Risk
The possible downside on an investment can take many forms including, for example, currency risk, country risk, inflation risk, market risk,...(Read more) ...

See also: Investment risk, Funding, Expense, Internal rate of return, Reinvestment risk