An example of ________ risk occurs when an investment does NOT keep up with prices that are increasing in the overall economy.

Question

Quizplus · Accepted Answer

Inflation risk is the risk of loss in purchasing power due to an increase in the overall level of prices in the economy. If an investment does not keep up with inflation, its real value decreases over time, resulting in a loss for the investor. This is a common risk associated with investments such as savings accounts or bonds that offer fixed rates of return.

An Example of ________ Risk Occurs When an Investment Does