What does 'Nominal' mean
Nominal is an unadjusted rate, value or change in value. This type of measure often reflects the current situation, such as the current price of a car, and doesn't make adjustments to reflect factors such as seasonality or inflation, which provide a more accurate measure in real terms.
BREAKING DOWN 'Nominal'
In most cases, value is measured in real terms rather than nominal terms, which make adjustments to give a more accurate measure.
For example, if you buy a $900 bond and are paid $1,000 for it a year later, your rate of return is 11.1%. This is the nominal rate of return; it is unadjusted and reflects the return on your bond. However, to get a more accurate picture of the actual return, the rate needs to be adjusted for inflation because the purchasing power of the your money has likely changed over the oneyear period. Therefore, if inflation for that year is 5%, the real rate of return is only 6.1% (11.1%5%).

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How does inflation affect fixedincome investments?
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