During inflationary times, there is a risk that the financial return on an investment will not keep pace with the rate of inflation.

Question

Quizplus · Accepted Answer

Inflation reduces the purchasing power of money, meaning it takes more money to buy the same goods and services. Therefore, if the financial return on an investment does not keep pace with the rate of inflation, the investor's real return (return adjusted for inflation) will be negative, resulting in a loss of purchasing power.

During Inflationary Times, There Is a Risk That the Financial