JAMB Commerce 2005 Question 48

Question 48

Stock Exchange

A good financial instrument which serves as a hedge against inflation is

  1. A.a bond
  2. B.a share
  3. C.an option
  4. D.a warrant
Show the answer and explanation

Answer: B (a share)

Explanation

Share prices and dividends tend to rise with prices, protecting their value; a bond's fixed interest and capital lose value when prices rise.