Search
Generic filters
Filter by Categories
Accounting
Banking

Finance




Inflation Risk


A type of risk that arises from the negative effect of inflation on purchasing  power. Inflation is a upward movement of the general level of price. Inflation reduces purchasing power, which is a risk for investors in cash equivalents such as fixed-income securities and instruments. Such investments involves inflation risk as holders receive a fixed rate of interest. The main concern for investors holding cash equivalents is that inflation will erode their income generated from such assets.

Inflation risk arises from the possibility that the future real value (after inflation) of an investment, asset, or income stream (cash flows) will erode over time by inflation.

Inflation risk is also known as inflationary risk or purchasing power risk.



ABC
Finance, as a field of knowledge, is substantially wide-ranging and virtually encompasses everything in the realm of corporate finance, financial management, ...
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    Your email address will not be published.*