Term
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Definition
| interest rate that serves as a leading indicator of furture trends |
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Term
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Definition
| interest rate the Fed offers to banks overnight loans |
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Term
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Definition
| interest rate brokerage firms pay for call money loans, basis for customer rates |
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Term
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Definition
| large denomination deposits commercial banks for a specified term |
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Term
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Definition
| Interest Rate for international banks |
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Term
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Definition
| short term debt instrument |
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Term
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Definition
| asset that makes single payment at maturity with no payments before maturity |
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Term
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Definition
| interest rate or bond yields, 1% of 1% |
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Term
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Definition
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Term
| term structure of interest rates |
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Definition
| relationship between time to maturity and interest rates, default free |
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Term
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Definition
| normally observed, with no adjustment for inflation |
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Term
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Definition
| assertion that nominal interest rates follow general level of inflation |
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Term
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Definition
| interest rates is a reflection of financial market beliefs, future interest rates |
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Term
| maturity preference theory |
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Definition
| long term IR to induce lenders into making longer term loans |
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Term
| market segmentation theory |
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Definition
| debt markets are segmented by maturity, separately in each segment |
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Term
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Definition
| annual coupon divided by par value |
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Term
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Definition
| dsicount rate that equates bond price with present value |
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Term
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Definition
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Term
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Definition
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Term
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Definition
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Term
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Definition
| bond net of accrued interest, bond price including accrued interest (full) |
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Term
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Definition
| price issuer must pay to buy it back |
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Term
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Definition
| present value of bonds remaining cash flows |
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Term
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Definition
| period which callable bond cannot be called |
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Term
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Definition
| assumes bond will be redeemed at the earliest call date |
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Term
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Definition
| changes in IR will result in losses |
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Term
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Definition
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Term
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Definition
1-price moves opposite of yields
2-longer maturity greater change in the price
3- price increases at diminishing rate maturity lengthens
4- percent change in price inverse to coupon rate
5- increase price greater from yield decrease than opposite |
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Term
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Definition
1- longer maturity longer duration
2- duration increases at decreasing rate as maturity lengthens
3-higher bond coupon, shorter duration
4- higher yield, shorter duration |
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Term
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Definition
| portfolio for future cash outlay |
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Term
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Definition
| minimize uncertainty surrounding target date value |
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Term
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Definition
| bond prices decrease from date calue unknown |
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Term
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Definition
| average return in the future on risky asset |
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Term
| investment opportunity set |
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Definition
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Term
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Definition
| risk that influences a large number of assets |
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Term
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Definition
| measures relative systematic risk of an asset |
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Term
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Definition
| relationship between systematic risk and expected return |
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Term
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Definition
| theory of risk and return for securities in a competitive capital market |
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Term
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Definition
| tendency of two things to move or vary together |
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Term
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Definition
1- pure time value of money
2- reward for bearing systemativ risk
3- the amount of systematic risk |
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Term
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Definition
| portfolio risk premium over portfolio return standard deviation, higher better |
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Term
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Definition
| portfolio risk premium over portfolio beta |
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Term
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Definition
| raw return less return predicted by capm, higher better |
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