Inflation-linked bonds are fixed-income securities whose principal and coupons are linked to price indices. They are designed to eliminate the risk of unexpected inflation to the holders of the bonds. In this discussion note, we compare the risks and rewards of inflation-linked bonds with those of nominal fixed-income securities. We also evaluate the role of index-linked bonds in diversified portfolios.
Norges Bank Investment Management
Discussion note;10/2012 Diskusjonsnotat;10/2012
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