What is an inflation-linked bond


Problem

The following excerpt is from "Lowflation No Bar to Linker Sales as Germany Plans 2030 Bond" by Lucy Meakin and David Goodman, Bloomberg.com, April 1, 2014.: Germany is planning to auction its longest-maturity inflation-linked bonds to date, a sign that the slowest pace of consumer-price increases in the euro region for more than four years isn't deterring investors.

a. What is an inflation-linked bond?

b. Why do you think investors were not deterred from buying these bonds despite low rates of inflation at the time?

The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.

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Microeconomics: What is an inflation-linked bond
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