## Base Value

Key

**in Inflation Bond refers to the base inflation index value**

*Base Value***that is used as the denominator in the ratio**

*I(t₀)***that represents the inflation growth applicable to any time**

*Q(t) = I(t-lag)/I(t₀)***with an observation lag**

*t*

*lag*Typically, the time

**is the time when the bond starts accruing.**

*t₀*The ratio

**multiplies any given real amount resulting from a contractual bond coupon rate or principal redemption to form the nominal amount that is actually paid.**

*Q(t)*More details about the conversion of a real amount to the corresponding nominal inflation adjusted amount at Inflation Adjusted Rate Swap