X-Nico

unusual facts about interest rate



Bond convexity

In finance, bond convexity is a measure of the sensitivity of the duration of a bond to changes in interest rates, the second derivative of the price of the bond with respect to interest rates (duration is the first derivative).


see also

Antal E. Fekete

The discount rate cannot be regarded as an "interest rate", a position Charles Rist and John Fullarton have also taken.

Hot money

Hot money is usually originated from the capital rich, developed countries that have lower GDP growth rate and lower interest rates compared to the GDP growth rate and interest rate of emerging market economies such as India, Brazil, China, Turkey, Malaysia etc.

Interest rate cap and floor

However, interest rate controls are most often found at the lower end of the market where financial institutions (usually MFIs) use the information asymmetry to justify high lending rates.

Interest sensitivity gap

The interest rate sensitivity gap is much less accurate than modern interest rate risk management technology where the impact of a change in the yield curve can be analyzed using the Heath-Jarrow-Morton framework based on the work of researchers such as John Hull, Alan White, Robert C. Merton, Robert A. Jarrow and many others.

Money Economics

Money Economics published an article on August 2, 2007 on App-o-rama, analyzing the maximum actual profit one can obtain from the interest rate arbitrage.

Negative amortization

: The variable, such as the COFI; COSI; CODI or often MTA, which determines the adjustment as an increase or decrease in the interest rate.

Parsian Bank

In early 2006 the bank faced severe financial difficulties due to a forced interest rate change imposed upon the banking sector by the Iranian President, Mahmoud Ahmadinejad.

Raymond Turmel

The brothers have organized protests against interest rates on Parliament Hill in Ottawa (Globe and Mail, 16 April 1982), and Turmel argued before the Supreme Court of Canada in 1982 that the Bank of Nova Scotia's interest rate policies were a violation of natural and Biblical law.

Regulation Q

Regulation Q ceilings for savings accounts and all other types of accounts except for demand deposits were phased out during the period 1981-1986 by the Depository Institutions Deregulation and Monetary Control Act of 1980; as of March 31, 1986, all interest rate ceilings had been eliminated except for the ban on demand deposit interest, which was then the only remaining substantive component of Regulation Q.

Snowballing

Debt-snowball method: A method of paying down credit card debt by paying the minimum on all balances, except the one with the highest interest rate

Term loan

One thing to consider when getting a term loan is whether the interest rate is fixed or floating.

Yield spread premium

Update 11/25/2008 - Yield Spread Premiums are most commonly used by the Government Sponsored Enterprises (Fannie Mae and Freddie Mac) as well as the FHA and VA loan programs to 'steer' borrowers into specific tranches of interest rate most advantageous to the marketplace through specific cash incentives to the mortgage originator.