A security that is linked to any index, such as a price index, a basket of currencies or assets, or a combination of interest rates. As the name would suggest, indexed securities are typically designed to provide borrowers and investors with a protection against changes in the level of prices, rates, or overall asset performance, in the real economy.
A prime example of an indexed security is an inflation-indexed security, which helps protect a holder or an issuer from changes in the average prices at the macroeconomic level.
