Some securities provide inflationary risk protection without attempting to do so. Examples of them include:...
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Some securities provide inflationary risk protection without attempting to do so. Examples of them include:
(2 Points)
Convertible bonds as they are traded like bonds and sometimes like stocks and variable-rate securities because their cash flows to the holder (interest payments, dividends, etc.) are based on indices such as the prime rate that are directly or indirectly affected by inflation rates.
Variable-rate securities because their cash flows to the holder (interest payments, dividends, etc.) are based on foreign exchange rate such as the prime rate that are directly or indirectly affected by inflation rates or putable bonds as they are traded like bonds and sometimes like stocks.
Callable bonds as they are traded like bonds and sometimes like stocks and fixed-rate securities because their cash flows to the holder (interest payments, dividends, etc.) are based on indices such as the prime rate that are directly or indirectly affected by inflation rates.
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