Respuesta :
The possibility that inflation will result in a decrease in the purchasing power of an investment will be referred to as inflationary risk.
Because bond payments are typically based on fixed interest rates, an increase in inflation has a negative impact on their purchasing power, making them particularly vulnerable to inflationary risk.
What is an illustration of a risk from inflation?
The classic illustration of an asset that is subject to inflationary risk is lending a fixed amount of money for later repayment. This is because the money repaid may be significantly less valuable than the money lent.
Is the risk of inflation a systematic risk?
The systematic risk component of inflation risk is the possibility that all prices will rise. This risk has an impact on all customers. It is impossible to diversify away this risk. The non-systematic risk component of inflation risk is the possibility of an increase in the prices of a specific goods basket.
Learn more about inflationary risk here:
https://brainly.com/question/26113005
#SPJ4
