Cash Equivalents - Inflation and Relative attractiveness

CFA Level III Economics
#1

Hi all,

For periods where inflation is above expectations, the material states that the relative attractiveness for cash equivalents is positive. My thinking is that it would do the opposite, considering the purchasing power would be decreasing.

Can someone help to explain?

Thanks

#2

Cash is king. The text is correct.

https://www.analystforum.com/forums/cfa-forums/cfa-level-iii-forum/91370530