Interest Rate

Interest rates are one of the most important factors determining the behaviour of the markets.

interest rate futures Definition Futures contract by which lenders and borrowers commit themselves to the interest rates at which they will lend or borrow specified sums on a specified future date.

Interest rate risk The risk that a savings association's assets and/or liabilities will decline in market value because of changes in market interest rates.

Interest Rate Swap, Definition A swap in which the two counterparties agree to exchange interest rate flows.

All investors are affected by interest rate risk or the chance that interest rates will change the value of their investment. But interest rates have the greatest impact on bonds. When rates rise, the value of bonds fall.

Interest rate risk The risk that a security 's value changes due to a change in interest rates. E.g., a bond's price drops as interest rates rise. For a depository institution, a.k.

Interest rate and annual percentage yield (APY) are two different things, though they are related terms. When you open a savings account, you'll often be given both numbers, usually expressed in percentages.

Interest Rate Risk The potential for losses arising from changes in interest rates Next Forex Glossary Term: Interest Rate Swaps ...

interest rate, you really need the concept of the present value of money (also see the article elsewhere in the FAQ on this topic). Computing present value figures helps you answer questions like "what's better, $95 today or $100 one year from now?

Interest rates at their core are the payment that a lender requires from a borrower in return for lending them money, normally stated as a percentage of the amount borrowed.

Interest Rate Derivatives were initiated by the establishment [around 1980] of the four 3-month IMM Eurodollar Futures Contracts [Dec, Mar, Jun, Sept] on the Chicago Mercantile Exchange [CME].

An interest rate that moves up and down based on the changes of an underlying interest rate index. Next: Variable Life Insurance Policy Return to previous results ...

Are Interest Rates fated to Rise? Greg Silberman CFA, CA(SA) Profession: Portfolio Manager and Research Analyst Company: Ritterband Investment Management LLC e-Mail: greg@goldandoilstocks.com Website: blog.goldandoilstocks.com ...

First, while inflation and interest rates often move in tandem, their correlation is not perfect. As a result, it is possible rates could rise even without inflation moving higher. Second, TIPS generally yield less than traditional Treasuries.

INTEREST RATE SWAP CONTRACT - A contract entered into by an issuer or obligor with a swap provider to exchange periodic interest payments.

Interest rates play a key role in the general business cycle and the financial markets. When interest rates change, or interest rate expectations change, the effects are far-reaching.

Interest rate differientals - The difference between interest rates of two countries. Intraday Charts - Charts that show the price movement within the day.

Interest Rate Swap: A swap in which the two counterparties agree to exchange interest rate flows.

Interest Rate Intermarket Surveillance Group (ISG) Intermarket Surveillance Information System (ISIS) ...

Interest Rate Futures - T-Bonds represent long-term interest rates and Eurodollars are for short-term interest rates. Energy Futures - Natural gas, heating oil and crude oil futures are the most widely known in this sector.

Interest rate The amount charged for borrowing money. [ I - K ] A B C D E F G H I J K L M N O P Q R S T U V W X Y Z ...

Interest Rate - Another important economic indicator. The price, calculated as a percentage of the money loaned, that banks are charging borrowers for the use of the banks'money.

Interest Rate Futures Futures contracts traded on fixed income securities such as U.S. Treasury issues, or CDs. Currencies are excluded from this category, even though interest rates are a factor in currency values. Interim Order ...

Interest rate The yield over time that interest payments represent. For instance, if you loaned someone $100 for a month and they repaid you $110 when the month ended, you would earn an interest rate of 10 percent.

Interest Rate The price, calculated as a percentage of the money loaned, that banks are charging borrowers for the use of the banks' money. Intermarket Trading System (ITS) ...

Interest Rate Options: An agreement permitting a party to obtain a particular interest rate, issued both OTC and by exchanges.

Interest Rate Swaps An arrangement that requires both sides of the transaction to make payments to each other based on two different interest rates. The most commonly traded requires one side to pay a fixed rate and the other to pay a floating rate.

Interest Rate Driven Refers to a point in the business cycle when interest rates are declining and bond prices are rising.

Interest rate swap (IRS): A swap agreement where interest payments on a certain amount of principal are exchanged between two parties on a specified date.

Interest rate risk For a bond, the risk that a rise in interest rates will decrease the bond's price. For a depository institution, also called funding risk, the risk that spread income will suffer because of a change in interest rates.

Interest Rate Swap Points - Interest rates may be determined by a simple rule using the bid and offer spread on an fx rate.

Interest rate at which brokerage firms borrow from banks to finance their clients' security positions. Business Describes the primary product or service offered by a given corporation.

Interest Rate The price borrowers pay for using someone else's money; expressed as a percentage of the amount borrowed. Also, money paid by financial institutions to depositors.

Interest rate risk: The risk that interest rates will increase, reducing or eliminating your return on a rate-sensitive investment.

Interest rate Swaps - An agreement to swap interest rate exposures from floating to fixed or vice versa. There is no swap of the principal. It is the interest cash flows be they payments or receipts that are exchanged.

Interest rate swap, (IRS): A transaction where one party pays a fixed rate of interest in exchange for a floating rate of interest. Both interest payments are calculated by reference to the principal or nominal size of the transaction.

Interest Rate Parity :A relationship which must hold between the interest rates of two countries. Interest Rates Intermediaries :See Financial Intermediaries.

Interest Rate Risk: Interest rate risk is a type of investment risk in which changes in interest rates negatively affect the value of an investment portfolio.

Interest Rates Represents the different prices a bank and other entities charge customers to borrow money. more...

Interest Rate of Return The percentage increase in the value of a bond over the holding period that results from interest income including all coupon payments, any change in accrued interest between the settlement date and the horizon date, ...

interest rate cap An agreement where a party pays a premium up front or in installments to the counterparty.

Interest Rate Risk - The prospect that Treasury and agency securities will decline in price if economy-wide interest rates rise. Interim Dividend - A dividend declared part way through a company's financial year, authorized solely by the directors.

Interest rate risk The chance that a security's value will change due to a change in interest rates. For example, a bond's price drops as interest rates rise.

Interest rate risk Amount of mismatches and maturity gaps among transactions in the foreign exchange book.

Interest Rate The amount of money paid on a bank deposit, expressed as an annual percentage. Intermarket Analysis ...

Interest Rates: The Federal Reserve controls interest rates in the U.S. The chairman of the Federal Reserve, Alan Greenspan, periodically announces changes after the Federal Reserve board meets.

Interest Rate Risk The risk borne by fixed interest securities, and by borrowers with floating rate loans, when interest rates fluctuate. When interest rates rise, the market value of fixed interest securities declines and vice versa.

The interest rate paid on a debt security that the issuer promises to pay to the holder until maturity, expressed as an annual percentage of face value.

Real Interest Rate The net interest rate over the inflation rate. The growth rate of purchasing power derived from an investment. Red Chip ...

Fixed Interest Rate: A mortgage feature that structures the loan so that there will be no increases or decreases in the interest rate during the life of the loan.

Fixed Interest Rate: An interest rate used for loans, mortgages and bonds that remain at the same rate throughout the period.

wars, interest rates, oil prices, and currency collapses. The chart below shows 3 major indices over a 5 year period. Their growth rates may vary but all move in sympathy with each other.

[edit] Interest rate curve and short stock rate One difficulty that often arises in practice is how to derive the proper interest rate to use as an input.

Assumed Interest Rate The growth rate built into an annuity table to calculate the payout on variable annuities. See: Variable Annuity ...

Swap: An interest rate swap is an agreement between two parties to exchange interest rate payments on a fixed (notional) amount of debt.

Collars (Interest Rate Collars) The maximum and minimum rates of interest applicable to a floating-rate security. Collateralised Bond A bond that is secured or collateralised by assets of the issuing company such as real estate or factory equipment.

The stated interest rate on a bond, paid by a corporation or government entity throughout the bond's life. CURRENT YIELD ...

Coupon The interest rate on a debt instrument expressed in terms of a percent on an annualized basis that the issuer guarantees to pay the holder until maturity.

Yield: the interest rate earned on a bond, or the dividend paid on an investment, expressed as a percentage. Quick picks ...

Prime Rate: Interest rate charged by major banks to their most creditworthy customers.

See also: Interest, Trading, Risk, Trade, Count