the relationship between inflation and cash returns

Hi guys,

When the schewser notes talk about the relationship between inflation and cash returns, it says:

Low inflation does not affect the return on cash instruments. Higher inflation is a positive for cash because the returns on cash instruments increase as inflation increases. Deflation is negative for cash because the return falls to almost zero.

Is that normally the case with cash instruments?

Please help guys. Appreciate your help. Thanks.

i’ll try!

always remeber that inflation rate correlate with short term rates(which reflect cash instrument returns) in the short run.

review the stages of the business cycles. think will help u.

its quite conceptual!