Municipal Inflation-Linked Securities

AAA

DEFINITION of 'Municipal Inflation-Linked Securities'

Investment vehicles issued by various levels of governments containing variable coupon payments that increase and decrease with changes in the consumer price index (CPI).

INVESTOPEDIA EXPLAINS 'Municipal Inflation-Linked Securities'

This type of debt security is similar to regular municipal bonds, but municipal inflation-linked securities offer investors a slightly lower coupon rate because these securities are safer than debt instruments that expose the holder to inflation risk. Also, because these securities carry reduced inflation risk, they don't - like other debt securities - have the potential to increase in price should the rate of inflation subside.

RELATED TERMS
  1. Principal Exchange Rate Linked ...

    A type of debt security that pays interest semiannually and has ...
  2. Consumer Price Index - CPI

    A measure that examines the weighted average of prices of a basket ...
  3. Coupon

    The interest rate stated on a bond when it's issued. The coupon ...
  4. Inflation-Indexed Security

    A security that guarantees a return higher than the rate of inflation ...
  5. Inflationary Psychology

    A state of mind that leads consumers to spend more quickly in ...
  6. Inflationary Risk

    The uncertainty over the future real value (after inflation) ...
Related Articles
  1. Curbing The Effects Of Inflation
    Bonds & Fixed Income

    Curbing The Effects Of Inflation

  2. Introduction To Inflation-Protected ...
    Options & Futures

    Introduction To Inflation-Protected ...

  3. Hedge Your Bets With Inflation-Linked ...
    Retirement

    Hedge Your Bets With Inflation-Linked ...

  4. What You Need To Know About Preferred ...
    Trading Strategies

    What You Need To Know About Preferred ...

comments powered by Disqus
Hot Definitions
  1. Letter Of Credit

    A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. ...
  2. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  3. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  4. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  5. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  6. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
Trading Center