Entri Blog
No Result
View All Result
Sunday, December 10, 2023
  • State PSC
    • Kerala PSC
      • Kerala PSC Exams
      • Kerala PSC Notification
      • Kerala PSC Exam Calender
      • Kerala PSC Previous Question papers
      • KAS Exam
      • KAS Previous Year Question papers
      • Kerala PSC VEO Notification
      • Kerala Police SI
      • Kerala PSC LDC Notification
      • Kerala PSC LP/UP Assistant
      • Kerala PSC Village Field Assistant Notification
      • Kerala PSC LD Typist Notification
      • Kerala PSC Food Safety Officer
      • Kerala PSC Excise Inspector Notification
      • Kerala PSC BDO Notification
      • Kerala PSC CPO Notification
      • Kerala PSC LGS Notification
    • TNPSC
    • APPSC
    • TSPSC
    • BPSC
    • Karnataka PSC
    • MPPSC
    • UPPSC
  • Banking
    • IBPS PO Notification
    • IBPS Clerk Notification
    • SBI PO Notification
    • SBI Clerk Notification
    • SBI SO Notification
    • SBI Apprentice Notification
    • Canara Bank PO Notification
    • Indian Bank PO Notification
    • RBI Assistant Notification
    • RBI Office Attendant Notification
    • IBPS RRB Notification
    • IBPS RRB Office Assistant Notification
  • Skilling
    • Coding
    • Spoken English
    • Stock Marketing
  • Courses
    • Data Science Course
      • Data Science Malayalam
      • Data Science Training in Kochi
      • Data Science Training in Trivandrum
      • Data Science Course in Calicut
      • Data Science Training in Thrissur
    • Full Stack Developer Course
      • Full Stack Development Malayalam
      • Full Stack Development Hindi
      • Full Stack Development Tamil
      • Full Stack Development Telugu
      • Full Stack Development Kannada
    • Stock Market Course
      • Stock Market Course in Malayalam
      • Stock Market Course in Tamil
      • Stock Market Course in Kannada
      • Options Trading Course
    • Spoken English Course
      • Spoken English Course in Malayalam
      • Spoken English Course in Hindi
      • Spoken English Course in Telugu
      • Spoken English Course in Tamil
      • Spoken English Course in Kannada
    • Python Programming Course
    • Quantity Surveying Course
    • Performance Marketing Course
    • Practical Accounting Course
      • Tally Course
      • Taxation Course
      • UAE Accounting
      • GST Course
    • Mern Stack Developer Course
      • Full Stack Developer Course in Kochi
      • Full Stack Developer Course in Trivandrum
      • Full Stack Developer Course in Calicut
      • Full Stack Developer Course in Pune
      • Full Stack Developer Course in Bangalore
      • Full Stack Developer Course in Hyderabad
      • Full Stack Developer Course in Chennai
      • Full Stack Developer Course in Indore
      • Full Stack Developer Course in Jaipur
      • Full Stack Developer Course in Coimbatore
    • Digital Marketing Training
      • Digital Marketing Course in Kochi
      • Digital Marketing Course in Trivandrum
      • Digital Marketing Course in Calicut
      • Digital Marketing Course in Kollam
      • Digital Marketing Course in Thrissur
      • Digital Marketing Course in Kottayam
      • Digital Marketing Course in Kannur
    • Other Courses
      • Montessori Teacher Training
      • MEP Course
      • German Language Course
      • OET Coaching
      • Nurses Recruitment Abroad
      • ChatGPT Course
      • Forex Trading Course
      • Yoga Teacher Training Course
      • Oil and Gas Course
      • SAP FICO Course
  • Others
    • Railway
    • SSC
    • GATE
    • MAT
    • KMAT
    • UPSC
    • TET
      • APTET
      • CTET
      • DSSSB
      • Karnataka TET
      • Kerala TET
      • KVS
      • MPTET
      • SUPER TET
      • TNTET
      • TSTET
      • UPTET
  • Aptitude Questions
  • Test Prep
    • PSC Coaching
      • KPSC Degree Level Exam Preparation
      • Kerala PSC 12th Level Exam Preparation
      • Kerala PSC 10th Level Exam Preparation
      • KAS Coaching
      • Kerala PSC LDC Coaching
      • Kerala PSC Fireman Coaching
      • KSFE Assistant Exam Preparation
      • Kerala PSC SI Exam Coaching
      • KTET Coaching
      • SET Coaching
      • Kerala PSC Lecturer in Diet Coaching
      • Khadi Board LDC Exam Preparation
      • LP/UP Assistant Exam Coaching
      • HSST Exam Preparation
      • HSA Exam Preparation
      • EMRS Coaching
      • University LGS Exam Preparation
      • University Assistant Exam Coaching
    • IELTS Training Online
    • Bank Exam Coaching Online
      • IBPS SO Online Coaching
      • IBPSC PO Online Coaching
      • IBPSC Clerk Online Coaching
      • SBI PO Coaching
      • SBI Clerk Online Coaching
      • RBI Grade B Coaching
      • RBI Assistant Coaching
    • UPSC Online Coaching
    • SSC Online Coaching
      • SSC JE Online Coaching
    • RRB JE Online Coaching
      • RRB Exams Coaching
    • CAT Online Coaching
    • GATE Online Coaching
Data Science
Entri Blog
  • State PSC
    • Kerala PSC
      • Kerala PSC Exams
      • Kerala PSC Notification
      • Kerala PSC Exam Calender
      • Kerala PSC Previous Question papers
      • KAS Exam
      • KAS Previous Year Question papers
      • Kerala PSC VEO Notification
      • Kerala Police SI
      • Kerala PSC LDC Notification
      • Kerala PSC LP/UP Assistant
      • Kerala PSC Village Field Assistant Notification
      • Kerala PSC LD Typist Notification
      • Kerala PSC Food Safety Officer
      • Kerala PSC Excise Inspector Notification
      • Kerala PSC BDO Notification
      • Kerala PSC CPO Notification
      • Kerala PSC LGS Notification
    • TNPSC
    • APPSC
    • TSPSC
    • BPSC
    • Karnataka PSC
    • MPPSC
    • UPPSC
  • Banking
    • IBPS PO Notification
    • IBPS Clerk Notification
    • SBI PO Notification
    • SBI Clerk Notification
    • SBI SO Notification
    • SBI Apprentice Notification
    • Canara Bank PO Notification
    • Indian Bank PO Notification
    • RBI Assistant Notification
    • RBI Office Attendant Notification
    • IBPS RRB Notification
    • IBPS RRB Office Assistant Notification
  • Skilling
    • Coding
    • Spoken English
    • Stock Marketing
  • Courses
    • Data Science Course
      • Data Science Malayalam
      • Data Science Training in Kochi
      • Data Science Training in Trivandrum
      • Data Science Course in Calicut
      • Data Science Training in Thrissur
    • Full Stack Developer Course
      • Full Stack Development Malayalam
      • Full Stack Development Hindi
      • Full Stack Development Tamil
      • Full Stack Development Telugu
      • Full Stack Development Kannada
    • Stock Market Course
      • Stock Market Course in Malayalam
      • Stock Market Course in Tamil
      • Stock Market Course in Kannada
      • Options Trading Course
    • Spoken English Course
      • Spoken English Course in Malayalam
      • Spoken English Course in Hindi
      • Spoken English Course in Telugu
      • Spoken English Course in Tamil
      • Spoken English Course in Kannada
    • Python Programming Course
    • Quantity Surveying Course
    • Performance Marketing Course
    • Practical Accounting Course
      • Tally Course
      • Taxation Course
      • UAE Accounting
      • GST Course
    • Mern Stack Developer Course
      • Full Stack Developer Course in Kochi
      • Full Stack Developer Course in Trivandrum
      • Full Stack Developer Course in Calicut
      • Full Stack Developer Course in Pune
      • Full Stack Developer Course in Bangalore
      • Full Stack Developer Course in Hyderabad
      • Full Stack Developer Course in Chennai
      • Full Stack Developer Course in Indore
      • Full Stack Developer Course in Jaipur
      • Full Stack Developer Course in Coimbatore
    • Digital Marketing Training
      • Digital Marketing Course in Kochi
      • Digital Marketing Course in Trivandrum
      • Digital Marketing Course in Calicut
      • Digital Marketing Course in Kollam
      • Digital Marketing Course in Thrissur
      • Digital Marketing Course in Kottayam
      • Digital Marketing Course in Kannur
    • Other Courses
      • Montessori Teacher Training
      • MEP Course
      • German Language Course
      • OET Coaching
      • Nurses Recruitment Abroad
      • ChatGPT Course
      • Forex Trading Course
      • Yoga Teacher Training Course
      • Oil and Gas Course
      • SAP FICO Course
  • Others
    • Railway
    • SSC
    • GATE
    • MAT
    • KMAT
    • UPSC
    • TET
      • APTET
      • CTET
      • DSSSB
      • Karnataka TET
      • Kerala TET
      • KVS
      • MPTET
      • SUPER TET
      • TNTET
      • TSTET
      • UPTET
  • Aptitude Questions
  • Test Prep
    • PSC Coaching
      • KPSC Degree Level Exam Preparation
      • Kerala PSC 12th Level Exam Preparation
      • Kerala PSC 10th Level Exam Preparation
      • KAS Coaching
      • Kerala PSC LDC Coaching
      • Kerala PSC Fireman Coaching
      • KSFE Assistant Exam Preparation
      • Kerala PSC SI Exam Coaching
      • KTET Coaching
      • SET Coaching
      • Kerala PSC Lecturer in Diet Coaching
      • Khadi Board LDC Exam Preparation
      • LP/UP Assistant Exam Coaching
      • HSST Exam Preparation
      • HSA Exam Preparation
      • EMRS Coaching
      • University LGS Exam Preparation
      • University Assistant Exam Coaching
    • IELTS Training Online
    • Bank Exam Coaching Online
      • IBPS SO Online Coaching
      • IBPSC PO Online Coaching
      • IBPSC Clerk Online Coaching
      • SBI PO Coaching
      • SBI Clerk Online Coaching
      • RBI Grade B Coaching
      • RBI Assistant Coaching
    • UPSC Online Coaching
    • SSC Online Coaching
      • SSC JE Online Coaching
    • RRB JE Online Coaching
      • RRB Exams Coaching
    • CAT Online Coaching
    • GATE Online Coaching
No Result
View All Result
Entri Blog
Spoken Eng
  • HTML Tutorial
  • DSA Tutorials
  • Tutorials in Hindi
    • HTML Tutorial for Beginners in Hindi
    • Python Tutorial for Beginners in Hindi
    • GIT and GITHUB Tutorial for Beginners in Hindi
  • Tutorials in Tamil
    • JavaScript Tutorial in Tamil
  • Tutorials in Telugu
    • HTML Tutorial For Beginners in Telugu
    • CSS Tutorial for Beginners in Telugu
    • Bootstrap Tutorial for Beginner in Telugu
  • Tutorials in Kannada
    • HTML Tutorial For Beginners in Kannada
banner top article banner top article
Home Articles

Inflation-Indexed Bonds (IIBs)

by Shibani Ghosh
October 6, 2021
in Articles, General Knowledge
Inflation-Indexed Bonds
Share on FacebookShare on WhatsAppShare on Telegram

A bond that aids the investors to receive a constant return and is issued by the Sovereign are called Inflation-Indexed Bond (IIB). This return does not depend on the level of inflation in the economy. This bond is designed to protect the investors against what is called macroeconomic risk in an economy.

The effect of uncertainty of inflation is avoided over the life of the bond. This kind of bond helps in paying interest at fixed intervals and the principal amount is returned at the time of maturity.

Take your GK mock test now!

Salient Features of Inflation-Indexed Bond (IIB)

  • This bond can be traded in the secondary market.
  • The investment limit is ten thousand to two crores.
  • RBI can directly sell it through the auction method. This in turn is used by the government which means they are borrowing it.
  • Protection is provided to both the principal amount and the coupon.
  • Like any other fixed-income instrument works, this bond is also taxed. 

Benefits of Inflation-Indexed Bond (IIB)

Benefits to Investors 

Investors get a huge benefit when it comes to a long-term indexed Treasury bond. They will get a long-term asset with the help of a fixed real yield. Though in the past, it was assumed that one was subjected to high inflation risk.

Benefits received by Policymakers 

Policymakers have the advantage of receiving information pertaining to real interest rates and inflation expectations in the market. One can get accurate information by using the liquid market for indexed treasury bonds.

Benefits met out to the U.S. Treasury 

The US Treasury would be benefited from the savings present on what is called interest expense. Similar to how the investors are protected, the US Treasury would also benefit.

Need to brush up for the General Knowledge exam? Entri is the right place!

Limitations of Inflation-Indexed Bonds

Limitations because of Taxation 

the advantages of indexed bonds are affected by taxation. There can be inflammation risks because of the taxation. The value of the indexed bonds falls because of taxation, causing a loss. but again when compared, the risk is lesser for indexed bonds than for nominal bonds.  the tax rate causes the real yield to fall.

Effect of Market Liquidity 

When considering indexed bonds for tax treatment, the liquidity of the market can be limited. It is seen that whatever the condition is the indexed bond market is less liquid than the nominal bond market. the Treasury has to pay a liquidity premium when there is much less liquid in the market for indexed Treasury bonds. Since things are uncertain, there Is always a possibility that investors have to change their holdings of security from time to time. another problem is that this adjustment is quite costly for illiquid assets as compared to a liquid asset.         The issuer has to then pay and compensate the investors. 

Limitations related to Indexing 

When seen closely, if the inflation is single and immediately available, the lags are not too much and would not cause a heavy risk. But the lags can be a problem when the institutional arrangements are concerned. These arrangements are related to trading and settling bonds concerning coupon payment dates.

Take GK classes here!

Takeaway 

In the US financial markets, these inflation-indexed bonds are of great valuable innovation. This helps the investors, treasury and policymakers by providing useful benefits. The treasury interest expense is saved, investors and issuers of this bond are saved from the inflation risk. When combined with nominal bonds, it gives additional information on rates of interest and inflation expectations. 

You can get more guidance on general knowledge on the Entri App. mock tests, videos on various topics are some of the help you will get from this app. Start a detailed and better preparation for your exams with Entri! 

 

Share62SendShare

Shibani Ghosh

Pouring out my thoughts through words!

Related Posts

Is Learning Data Science Hard? - A Complete Guide for 2024
Articles

Is Learning Data Science Hard? – A Complete Guide for 2024

December 9, 2023
How to Effectively Manage and Control Project Costs as a Quantity Surveyor Effective Tips.
Articles

How to Effectively Manage and Control Project Costs as a Quantity Surveyor: Effective Tips

December 9, 2023
What Are the Different Paths to Enter a Data Science Career? [Latest]
Articles

What Are the Different Paths to Enter a Data Science Career? [Latest]

December 8, 2023
Next Post
SBI Apprentice Answer Key 2023

SBI Apprentice Answer Key 2023 - Link to Download

Latest Posts

  • How to Prepare for IELTS in Two Month: Tips & study plan
  • Step-by-Step Guide Registration for the IELTS Exam in India
  • Tips and Tricks to Crack the OET Exam in the First Attempt
  • Best Lead Generation Techniques that Work in 2024
  • Highest Paying Jobs for Mechanical Engineers in 2024

Trending Posts

  • states of india and their capitals and languages

    List of 28 States of India and their Capitals and Languages 2023 – PDF Download

    152243 shares
    Share 60894 Tweet 38059
  • List of Government Banks in India 2023: All you need to know

    65548 shares
    Share 26219 Tweet 16387
  • Kerala Bank Assistant Manager Syllabus 2023: Download Expected Syllabus PDF

    701 shares
    Share 280 Tweet 175
  • KSDA Recruitment 2023 Apply Online for 9264 FDA SDA Posts – Qualification

    9449 shares
    Share 3780 Tweet 2362
  • TNPSC Group 2 Posts and Salary Details 2022

    40012 shares
    Share 16005 Tweet 10003

Courses

  • Data Science Course
  • Full Stack Developer Course
  • Data Science Course in Malayalam
  • Full Stack Developer Course in Malayalam
  • Full Stack Developer Course in Hindi
  • Full Stack Developer Course in Tamil
  • Full Stack Developer Course in Telugu
  • Full Stack Developer Course in Kannada
  • Python Programming Course
  • Practical Accounting Course
  • Quantity Surveying Course
  • Stock Market Course
  • Stock Market Course in Malayalam
  • Stock Market Course in Tamil
  • Stock Market Course in Kannada
  • Options Trading Course

Company

  • Become a teacher
  • Login to Entri Web

Spoken English Courses

  • Spoken English Course
  • Spoken English Course in Malayalam
  • Spoken English Course in Hindi
  • Spoken English Course in Tamil
  • Spoken English Course in Telugu
  • Spoken English Course in Kannada
  • Spoken English Course for Housewives
  • Spoken English Course for Working Professionals
  • Spoken English Course for School Students
  • Spoken English Course for College Students
  • Spoken English Course for Job Seekers
  • AI Powered Spoken English Course

Quick Links

  • Aptitude Questions
  • Articles
  • Videos
  • Entri Daily Quiz Practice
  • Current Affairs & GK
  • News Capsule – eBook
  • Preparation Tips
  • Kerala PSC Gold
  • Entri Skilling
  • Kerala PSC

Other Courses

  • OET Coaching Classes
  • Nurse Recruitment Abroad
  • Forex Trading Course
  • Montessori Teachers Training
  • Performance Marketing Course
  • German Language Course
  • MEP Course
  • Oil and Gas Course Online
  • Yoga Teacher Training Course
  • Digital Marketing Course
  • German Language A1 Course
  • German Language A2 Course
  • German Language B1 Course
  • German Language B2 Course

Popular Exam

  • IBPS Exam
  • SBI Exam
  • Railway RRB Exam
  • Kerala PSC
  • Tamil Nadu PSC
  • Telangana PSC
  • Andhra Pradesh PSC
  • MPPSC
  • UPPSC
  • Karnataka PSC
  • Staff Selection Commission Exam

© 2023 Entri.app - Privacy Policy | Terms of Service

No Result
View All Result
  • State PSC
    • Kerala PSC
      • Kerala PSC Exams
      • Kerala PSC Notification
      • Kerala PSC Exam Calender
      • Kerala PSC Previous Question papers
      • KAS Exam
      • KAS Previous Year Question papers
      • Kerala PSC VEO Notification
      • Kerala Police SI
      • Kerala PSC LDC Notification
      • Kerala PSC LP/UP Assistant
      • Kerala PSC Village Field Assistant Notification
      • Kerala PSC LD Typist Notification
      • Kerala PSC Food Safety Officer
      • Kerala PSC Excise Inspector Notification
      • Kerala PSC BDO Notification
      • Kerala PSC CPO Notification
      • Kerala PSC LGS Notification
    • TNPSC
    • APPSC
    • TSPSC
    • BPSC
    • Karnataka PSC
    • MPPSC
    • UPPSC
  • Banking
    • IBPS PO Notification
    • IBPS Clerk Notification
    • SBI PO Notification
    • SBI Clerk Notification
    • SBI SO Notification
    • SBI Apprentice Notification
    • Canara Bank PO Notification
    • Indian Bank PO Notification
    • RBI Assistant Notification
    • RBI Office Attendant Notification
    • IBPS RRB Notification
    • IBPS RRB Office Assistant Notification
  • Skilling
    • Coding
    • Spoken English
    • Stock Marketing
  • Courses
    • Data Science Course
      • Data Science Malayalam
      • Data Science Training in Kochi
      • Data Science Training in Trivandrum
      • Data Science Course in Calicut
      • Data Science Training in Thrissur
    • Full Stack Developer Course
      • Full Stack Development Malayalam
      • Full Stack Development Hindi
      • Full Stack Development Tamil
      • Full Stack Development Telugu
      • Full Stack Development Kannada
    • Stock Market Course
      • Stock Market Course in Malayalam
      • Stock Market Course in Tamil
      • Stock Market Course in Kannada
      • Options Trading Course
    • Spoken English Course
      • Spoken English Course in Malayalam
      • Spoken English Course in Hindi
      • Spoken English Course in Telugu
      • Spoken English Course in Tamil
      • Spoken English Course in Kannada
    • Python Programming Course
    • Quantity Surveying Course
    • Performance Marketing Course
    • Practical Accounting Course
      • Tally Course
      • Taxation Course
      • UAE Accounting
      • GST Course
    • Mern Stack Developer Course
      • Full Stack Developer Course in Kochi
      • Full Stack Developer Course in Trivandrum
      • Full Stack Developer Course in Calicut
      • Full Stack Developer Course in Pune
      • Full Stack Developer Course in Bangalore
      • Full Stack Developer Course in Hyderabad
      • Full Stack Developer Course in Chennai
      • Full Stack Developer Course in Indore
      • Full Stack Developer Course in Jaipur
      • Full Stack Developer Course in Coimbatore
    • Digital Marketing Training
      • Digital Marketing Course in Kochi
      • Digital Marketing Course in Trivandrum
      • Digital Marketing Course in Calicut
      • Digital Marketing Course in Kollam
      • Digital Marketing Course in Thrissur
      • Digital Marketing Course in Kottayam
      • Digital Marketing Course in Kannur
    • Other Courses
      • Montessori Teacher Training
      • MEP Course
      • German Language Course
      • OET Coaching
      • Nurses Recruitment Abroad
      • ChatGPT Course
      • Forex Trading Course
      • Yoga Teacher Training Course
      • Oil and Gas Course
      • SAP FICO Course
  • Others
    • Railway
    • SSC
    • GATE
    • MAT
    • KMAT
    • UPSC
    • TET
      • APTET
      • CTET
      • DSSSB
      • Karnataka TET
      • Kerala TET
      • KVS
      • MPTET
      • SUPER TET
      • TNTET
      • TSTET
      • UPTET
  • Aptitude Questions
  • Test Prep
    • PSC Coaching
      • KPSC Degree Level Exam Preparation
      • Kerala PSC 12th Level Exam Preparation
      • Kerala PSC 10th Level Exam Preparation
      • KAS Coaching
      • Kerala PSC LDC Coaching
      • Kerala PSC Fireman Coaching
      • KSFE Assistant Exam Preparation
      • Kerala PSC SI Exam Coaching
      • KTET Coaching
      • SET Coaching
      • Kerala PSC Lecturer in Diet Coaching
      • Khadi Board LDC Exam Preparation
      • LP/UP Assistant Exam Coaching
      • HSST Exam Preparation
      • HSA Exam Preparation
      • EMRS Coaching
      • University LGS Exam Preparation
      • University Assistant Exam Coaching
    • IELTS Training Online
    • Bank Exam Coaching Online
      • IBPS SO Online Coaching
      • IBPSC PO Online Coaching
      • IBPSC Clerk Online Coaching
      • SBI PO Coaching
      • SBI Clerk Online Coaching
      • RBI Grade B Coaching
      • RBI Assistant Coaching
    • UPSC Online Coaching
    • SSC Online Coaching
      • SSC JE Online Coaching
    • RRB JE Online Coaching
      • RRB Exams Coaching
    • CAT Online Coaching
    • GATE Online Coaching

© 2023 Entri.app - Privacy Policy | Terms of Service