Liquidity premium
A liquidity premium is the extra return investors demand for holding a security that is less liquid.
Liquidity premium
Definition: [crh] Forward rate minus expected future short-term interest rate.
Liquidity premium
Forward rate minus expected future short-term interest rate.
Option premium ...
liquidity premium
(1) The portion of a security's yield that is attributable to investors' desire to hold liquidity.
(2) The difference or spread paid for liquidity.
Liquidity Premium. The part of an interest rate or other return that is intended to cover the fact that the investment is illiquid.
Liquidity Premium (LP) Additional return required to compensate investors for purchasing illiquid assets. Also see liquidity.
Liquidity Premium
An additional price paid for an asset on the basis of its greater liquidity or tradeability or, alternatively, an additional return required by an investor to compensate for lack of liquidity.
Liquidity premium
The amount that forward interest rates exceed expected future spot interest rates.
Self-liquidating loan
Loan to finance current assets, The sale of the current assets provides the cash to repay the loan.
A liquidity premium can be viewed as compensation for the lower liquidity of corporate bonds compared to government debt and for the risk that the market value of bonds will fall prior to maturity due to increasing credit spreads.
The Liquidity Preference Theory, also known as the Liquidity Premium Theory, is an offshoot of the Pure Expectations Theory.
Not only should they offer a liquidity premium, but the issuer's savings on the costs of issuance should also be shared with investors.
The term structure represents information set for the market. The main theories which explain the structure are: i) expectation theory, ii) segmented market, and iii) liquidity premium.
A biased expectations theory that asserts that the implied forward rates will not be a pure estimate of the market's expectations of future interest rates because they embody a liquidity premium.
Personal Finance Headlines
SEARCH: ...
rp = a risk premium reflecting the length of the investment and the likelihood the borrower will default lp = liquidity premium (reflecting the perceived difficulty of converting the asset into money and thus into goods).
Liquidity preference hypothesis
The argument that greater liquidity is valuable, all else equal. Also, the theory that the forward rate exceeds expected future interest rates.
Liquidity premium ...
to the Keynesian theory, interest is the payment to investors to persuade them to give up their liquidity. Longer-term investments, therefore, would command higher rates over shorter-term investments. This premium is known as the liquidity premium.
 See also: Term structure, Forward rate, Debt ratio, Long-term debt ratio, Liquid asset
  
|
RSS
