What is an Index Bond?
Index bonds are corporate bonds that guarantee that creditors will not suffer losses due to rising prices by linking interest rates to inflation rates.
Index bond
discuss
- Chinese name
- Index bond
- By
- Interest rates are linked to inflation
- Also known as
- Commodity-related bonds
- Use to
- Index of interest is not linked to inflation
- Index bonds are corporate bonds that guarantee that creditors will not suffer losses due to rising prices by linking interest rates to inflation rates.
- The linking method is usually: bond interest rate = fixed interest rate + inflation rate + fixed interest rate * inflation rate. Sometimes the index used to calculate interest is not linked to inflation and is linked to a specific commodity price (oil price, gold price). This type of bond is also called a commodity-related bond.