Related Words

Inflation Hedge: Accounting practices allowing for the effects of inflation.

Inflation-Escalator Clause: The fact that future inflation rates are not known. It is a possible contributing factor to the makeup of the term structure of interest rates.

Inflation-Indexed Securities: A clause in a contract providing for increases or decreases in inflation depending on fluctuations in the cost of living, production costs, and so forth.

Inflation-Protected Security (TIPS): US Treasury inflation-protected securities (TIPS) adust the principal twice a year to reflect inflation or deflation measured by the Consumer Price Index (CPI). The interest rate is fixed an . . . View Full Definition

Inflation-Adjusted Return: Inflation-adjusted return is what you earn on an investment after accounting for the impact of inflation. For example, if you earn 7% on a bond during a period when the inflation rate averag . . . View Full Definition

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

Inflation Rate: The inflation rate is a measure of changing prices, typically calculated on a month-to-month and year-to-year basis and expressed as a percentage. For example, each month the Bureau of Labor . . . View Full Definition

Inflation Risk: Investments designed to hedge against inflation and the loss of purchasing power associated with it.

Long Hedge: The purchase of a futures contract in anticipation of actual purchases in the cash market. Used by processors or exporters as protection against an advance in the cash price. Related: hedge, . . . View Full Definition

Money Market Hedge: The use of borrowing and lending transactions in foreign currencies to lock in the home currency value of a foreign currency transaction.