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Homework answers / question archive / if you expect the future inflation rate is low in next few years, what characteristics of straight bond will have a better performance?
if you expect the future inflation rate is low in next few years, what characteristics of straight bond will have a better performance?
In case of the inflation being lower than usual, the bondholder will have more money in the form of interest received when compared to current debt securities because these bonds pay interest that were fixed during the inflation time.