Inflation-indexed securities

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Inflation-indexed securities

Securities such as bonds or notes that guarantee a return higher than the rate of inflation if the security is held to maturity.

Inflation-Indexed Securities

A bond or other fixed-rate security with an interest rate that varies according to inflation. An inflation-indexed bond, for example, may pay a fixed coupon plus an additional coupon with the amount adjusted every so often according to some inflation indicator, such as the Consumer Price Index. If these securities are held to maturity, then the investor guarantees that the return will exceed the rate of inflation. Inflation-indexed securities exist to provide a low-risk investment vehicle in which the return is guaranteed not to fall below the rate of inflation. See also: I Bond.
References in periodicals archive ?
The finance ministry declared the buyback of Inflation Indexed Bonds (IIBs) linked to the wholesale price index (WPI).
However, it does so with an important qualification: the bonds should be inflation indexed.
The Government of India has announced the sale of new Inflation Indexed Government Stock - 2023 for a notified amount of 1,000 crore through yield-based auction .
In Hot Tip: Nominal Exchange rates and Inflation Indexed Bond Yields (NBER Working Paper No.
The Level-Pay Notes are to offer an annuity-like payment of USD100 per month, and would be inflation indexed.
Figure 11 compares the estimated standard deviation of the GMV portfolio with the annualized daily standard deviations of TIPS and inflation indexed gilts over the period where these bonds exist.
Inflation indexed government bonds, which were first issued by the Commonwealth of Massachusetts during the Revolutionary War, (1) have become rather popular and widely used in the industrialized world.
Treasury TIPS (Treasury Inflation Protected Securities), we examine the effects of lagging the inflation indexed return by 1, 2, and 3 months.
Treasury began the quarterly issuance of inflation indexed bonds, called Treasury Inflation Protection Securities (TIPS).
One sign that it's benign is the fact that the Treasury introduced inflation indexed bonds, called TIPS--Treasury Inflation Protection Securities--which in the current environment are generating a lot of interest.
Thus, the interest rate will remain fixed, but the amount of each interest payment will vary with the CPI-U Notice 96-51(34) explains the content of planned proposed and temporary regulations that will apply to all inflation indexed bonds.
Real yields are still attractive and we have almost 10% of the Fund's holdings in TIIS (Treasury Inflation Indexed Securities).