IWPP and Inflation swap: Difference between pages
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imported>Doug Williamson (Create page. Sources: linked pages and IOP webpage https://iopscience.iop.org/article/10.1088/1748-9326/ab1d74) |
imported>Doug Williamson (Add link.) |
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'' | ''Risk management and pensions risk management''. | ||
An inflation swap is a contract used to transfer inflation risk from one party to another through an exchange of cash flows. | |||
One party pays a fixed rate cash flow on a notional principal amount. | |||
The other party pays a floating rate linked to an inflation index, such as the Consumer Prices Index (CPI). | |||
The party paying the floating rate pays the inflation adjusted rate multiplied by the notional principal amount. | |||
== See also == | Usually, the principal does not change hands. | ||
* [[ | |||
* [[ | |||
* [[ | Inflation swap prices provide an estimate of what the market considers to be the expected future inflation rate. | ||
* [[ | |||
* [[ | |||
* [[ | ==See also== | ||
* [[ | *[[Consumer Prices Index]] (CPI) | ||
* [[ | *[[CPI swap]] | ||
*[[Flexible inflation targeting]] | |||
*[[Floating rate]] | |||
*[[Inflation]] | |||
*[[Inflation risk]] | |||
*[[Inflation target]] | |||
*[[Longevity swap]] | |||
*[[Notional principal]] | |||
*[[Principal]] | |||
*[[Swap]] | |||
*[[Treasury inflation-indexed securities]] | |||
[[Category:The_business_context]] | [[Category:The_business_context]] | ||
[[Category:Financial_products_and_markets]] | [[Category:Financial_products_and_markets]] | ||
Revision as of 06:58, 22 June 2023
Risk management and pensions risk management.
An inflation swap is a contract used to transfer inflation risk from one party to another through an exchange of cash flows.
One party pays a fixed rate cash flow on a notional principal amount.
The other party pays a floating rate linked to an inflation index, such as the Consumer Prices Index (CPI).
The party paying the floating rate pays the inflation adjusted rate multiplied by the notional principal amount.
Usually, the principal does not change hands.
Inflation swap prices provide an estimate of what the market considers to be the expected future inflation rate.
