Filter by Categories
Accounting
Banking

Derivatives




Inflation-Linked Derivative


A derivative whose underlying is the rate of inflation as measured by some inflation index such as consumer price index, retail price index, wholesale price index, etc. It is a natural development of the inflation-linked bond market. Inflation-linked derivatives allow market participants to have an exposure to inflation-linked cash flows, and are also an instrumental tool to enhance market liquidity in inflation-linked products and to enable investors to tailor cash flows in accordance with their requirements. Furthermore, inflation-linked exposures can be hedged using this type of derivatives.

Inflation-linked derivatives are also known as inflation-indexed derivatives or inflation derivatives.



ABC
Derivatives have increasingly become very important tools in finance over the last three decades. Many different types of derivatives are now traded actively on ...
Watch on Youtube
Remember to read our privacy policy before submission of your comments or any suggestions. Please keep comments relevant, respectful, and as much concise as possible. By commenting you are required to follow our community guidelines.

Comments


    Leave Your Comment

    Your email address will not be published.*