purchasing power risk

Definition

The risk of loss in the value of cash due to inflation.

Use this term in a sentence

You need to accurately evaluate what the purchasing power risk will be so that you know what you are dealing with.

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The purchasing power risk for building our plant in volatile Argentina is high as the inflation is rampant and unpredictable.

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There was some definite purchasing power risk, but overall we felt bullish about our direction in the coming year, with no major changes planned.

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factor model inflation risk