Purchasing Power Risk


Definition of "Purchasing power risk"

Sandra Morales real estate agent
Sandra Morales, Real Estate Agent Century 21 All Points Realty

Investment risk associated with the relationship between the yield (interest, dividends, and capital) of financial instruments and the rate of inflation in the economy. For fixed income financial instruments such as a fixed dollar annuity and fixed dollar life insurance, the financial security of the recipient is diminished in proportion to the rise of inflation.

 

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