The contract states that if the inflation rate in the first, Risk Management

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The contract states that if the inflation rate in the first

The United Gum Workers have a cost-of-living clause in their contract with AlontGum-Ery Foods. The contract is for two years. The contract states that, if the inflation rate in the first year exceeds 1%, wages in the second year will increase by the inflation rate of the first year. Does this clause increase or decrease risk? Explain.

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