Buying an inflation indexed bond is risky

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Reference no: EM131220751

"Buying an inflation-indexed bond is risky.

If I buy a conventional bond, I know what interest rate I will receive. With an indexed bond, the rate can rise or fall depending on inflation. Risk-averse savers should prefer conventional bonds." Discuss.

Reference no: EM131220751

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Buying an inflation indexed bond is risky : With an indexed bond, the rate can rise or fall depending on inflation. Risk-averse savers should prefer conventional bonds." Discuss.
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