Fixed Income

Inflation-Linked Bond

Definition

What is Inflation-Linked Bond?

A bond whose principalThe original amount of money invested or lent, excluding later returns. or coupon is adjusted using an inflationA sustained increase in the general price level, reducing the purchasing power of money. measure.

Example in practice

How This Looks in Practice

The principal rises with inflation, helping preserve purchasing powerThe quantity of goods and services that a sum of money can buy..

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Related Terms

Fixed Income

Bond

A debt security through which an investor lends money to an issuer in return for promised payments.

Fixed Income

Issuer

The government, company, or organisation that creates and sells a security.

Fixed Income

Face Value

The principal amount stated on a bond and usually repaid at maturity.

Money Markets

Treasury Bill

A short-term government debt instrument usually issued at a discount and repaid at face value.

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