Only capital
indexed inflation-linked bonds maintain the real value of capital
Only capital indexed inflation-linked bonds maintain
the real value of the capital amount during inflation. A capital indexed inflation-linked
bond´s capital value is maintained constant during inflation as well as the
real value of the periodic coupon payments.
A coupon indexed inflation-linked bond´s capital
values is a nominal value. It´s real value is not maintained constant during inflation.
Nicolaas Smith
Copyright (c) 2005-2012 Nicolaas J Smith. All rights reserved. No reproduction without permission.
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