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Module 6
NA
8
Finance
Not Applicable
06/06/2013
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Cards

Term

M 6-1

Risk-Free Rates

 Definition
The interest rates on short term Treasury Bills
Term

M 6-2

Yield Curve

 Definition
The series of spot rates over time
Term

M 6-2

N-Year Spot Rate

 Definition
The annual interest rate on the N-year Treasury STRIP
Term

M 6-4

Sn

 Definition
The spot rate of a zero-coupon STRIP maturing in N years
Term

M 6-4

Law of One Price

 Definition
A financial principle that says if you can calculate the value of a financial instrument in 2 ways, they must both give the same answer
Term

M 6-5

N-Year Forward Rate

 Definition
A rate agreed upon today for a one year loan to be made n years in the future
Term

M 6-6

1+in-1,n

 Definition

(1+sn)n

(1+sn-1)n-1

 
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