Glossary

Inflation-linked bond

A bond whose principal, and therefore its coupons, rise with a consumer price index, such as US TIPS.

Comparison After 3% inflation, the principal of an inflation-linked bond rises from 1,000 to 1,030. Year 0 Principal 1,000 Coupon 1% = 10 After +3% Principal 1,030 Coupon 1% = 10.30

Learn it in

← All terms