Which Inflation Indexation Aims to Mitigate?

The inflation risk, which inflation indexation aims to mitigate (check all that apply ) 1. Is the risk that the cash flow from an investment won't be worth as much in future because of changes in purchasing power due to inflation.

How do you mitigate inflation?

Investors have two options at their disposal to combat inflation risk: portfolio adjustments and spending adjustments. Portfolio adjustments include common inflation hedges like Treasury Inflation-Protected Securities (TIPS), commodities, and reduced bond exposure.

What is indexing in inflation?

Indexation means adjusting a price, wage, or other value based on the changes in another price or composite indicator of prices. Indexation can be done to adjust for the effects of inflation, cost of living, or input prices over time, or to adjust for different prices and costs in different geographic areas.