Risk-free interest rate

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	* Interest Rate - (Stock Market): Definition
		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 are one of the most important factors determining the behaviour of the markets.
		Interest Rate Anticipation a style of fixed income investing in which a manager makes investment decisions based on his forecast for the direction of interest rate movements...
	en.mimi.hu /stockmarket/interest_rate.html (1781 words)

	Risk-free interest rate - Wikipedia, the free encyclopedia
		The risk-free interest rate is thus of significant importance to modern portfolio theory in general, and is an important assumption for rational pricing.
		The risk-free interest rate is the interest rate that it is assumed can be obtained by investing in financial instruments with no risk.
		Since this interest rate can be obtained with no risk, it is implied that any additional risk taken by an investor should be rewarded with an interest rate higher than the risk-free rate (or with preferential tax treatment; some local government US bonds give below the risk free rate).
	www.wikipedia.org /wiki/Risk_free_interest_rate (191 words)

	Tasso d'interesse privo di rischio - Wikipedia
		Il tasso d'interesse privo di rischio (o Risk-free interest rate) nella teoria finanziaria rappresenta il tasso d'interesse di un'attività priva di rischio.
		Ogni altro investimento possibile infatti renderà questo "tasso base", con aggiunto un "premio al rischio" in base al rischio (di insolvenza e volatilità) intrinseco all'investimento proprio di ogni attività finanziaria.
	it.wikipedia.org /wiki/Risk_free_interest_rate (156 words)

	MortgageBankDirect - Secure a Low Interest Rate on your 15 Year, 30 Year, ARM or Equity Line Of Credit, Refinance Mortgage, Second Mortgage, Refinance Home Loan
		For an adjustable-rate mortgage where the interest rate and the minimum payment amount fluctuate independently of one another, this is a limit on the amount that payments can increase or decrease during any one adjustment period.
		Usually refers to a fixed rate mortgage where the interest rate is "bought down" for a temporary period, usually one to three years.
		In essence, the borrower is deferring the interest payment, which is why this is called "deferred interest." The deferred interest is added to the balance of the loan and the loan balance grows larger instead of smaller, which is called negative amortization.
	www.mortgagebankdirect.com (7850 words)

	Risk-free interest rate - Wikipedia
		Wähle „Risk-free interest rate suchen“ um nach Risk-free interest rate zu suchen.
		Ein Wörterbucheintrag zu Risk-free interest rate hat seinen Platz im Wiktionary (Wiktionary).
	de.wikipedia.org /wiki/Risk-free_interest_rate (144 words)

	Abnormal returns - Wikipedia, the free encyclopedia
		In contrast, excess returns are returns above the risk-free rate, as used in the CAPM.
		All text is available under the terms of the GNU Free Documentation License (see Copyrights for details).
		If the market average performs better than the individual stock then the abnormal return will be negative.
	en.wikipedia.org /wiki/Abnormal_returns (146 words)

	Arbitrage-free Binomial Interest Rate Model
		Since the strengths of the arbitrage-free interest rate model is to enable us to relative value other securities to the term structure of interest rates, we need to take these risks into account, beyond the fundamental time value of money concept.
		This establishes the relationship of the simulated interest rates to the term structure of interest rates and volatilities.
		The model assumes that the one-period interest rate volatility is constant over time and, as a result, the model cannot accept a term structure of volatilities.
	www.thomasho.com /analy_sol/documents/interest_rate_owen.htm (3942 words)

	Treasury Bonds, Notes & Bills- Interest Rate Futures and Commodity option trading
		Managing interest rate risk is a very necessary component of most investors long term investment portfolio strategies.
		Interest rate futures were pioneered by the Chicago Board of Trade (CBOT) in 1975 in response to a growing market need for tools that could protect against sharp and frequent swings in the cost of money.
		These prices are global interest rate barometers, reflecting moves in national and international rates, and are available to the public immediately.
	www.tkfutures.com /notes.htm (1041 words)

	Dividends, Interest Rates and Their Effect on Stock Options
		All the best option analysis models include interest rates in their calculations using a risk-free interest rate such as U.S. Treasury rates.
		When interest rates are steadily falling to a point where the Fed Funds' target is down to around 1.0% and short-term interest rates available to individuals are around 0.75% to 2.0% (like in late 2003), interest rates have a minimal effect on option prices.
		Interest rates are the critical factor in determining whether to exercise a put option early.
	www.investopedia.com /articles/optioninvestor/03/121003.asp (1477 words)

	Money The no-risk, tax-free high-interest savings
		Interest rates currently range from 2.7 per cent at HSBC (for £1 deposits) to 4.65 per cent at Northern Rock, although some of the best rates are boosted by short term bonuses.
		However, you know if you opt for a fixed account that you are locked in at that rate.' Bowes points out that some experts are expecting interest rates to be cut by the Bank of England soon, so a fixed-rate account could prove particularly favourable.
		Whether you are an investor who can't tolerate risk or simply need to build a cash safety net, one of your best options is a mini cash Isa.
	money.guardian.co.uk /print/0,3858,4553159-102272,00.html (513 words)

	SCMP.com - Glossary of Financial and Business Terms
		In banking, the risk that profits may decline or losses occur because a rise in interest rates forces up the cost of funding fixed-rate loans or other fixed-rate assets.
		The rate of interest excluding the effect of expected inflation; that is, the rate that is earned in terms of constant-purchasing-power dollars.
		Bonds which allow the initial interest rates to be adjusted on specific dates in order that the bonds trade at the value they had when they were issued.
	special.scmp.com /glossary/bfglosr.html (7574 words)

	Information on J&E Models
		Assigning one risk-free interest rate over the life of the option is a distortion of the typical market conditions; the yield curve is typically not flat.
		The risk-free interest rate is fixed over the life of the option.
		The Garman Kohlhagen model treats the risk free foreign interest rate as a continuous dividend yield being paid on the foreign currency.
	www.jeresearch.com /Opti-Calc/Models.htm (1786 words)

	Boom and Bust - Mises Institute
		In an unhampered market, the natural rate of interest would be equivalent to what is termed, in finance, the risk-free rate of interest.
		The natural rate of interest, or that rate that would exist on the unhampered market, measures consumers' time preference because it reflects what borrowers must pay lenders to persuade the lenders to delay their own consumption.
		If I demand a rate of interest of at least 5%, this means that a $105 dinner next year is marginally more valuable to me than a $100 dinner this year.
	www.mises.org /fullstory.asp?control=485&FS=Boom+and+Bust+ (2206 words)

	Mortgage rates, home loans, CD rates, auto loans, credit cards, mortgages and more
		Interest rate for inflation-fighting Series I bond will change Nov. 1.
		Rate Trend Index: Our experts predict where mortgage rates and CD rates are heading.
		Weekly rate analysis: Mortgage rates up for sixth straight week.
	www.BankRate.com (482 words)

	Risk Free Interest Rate - finance
		The risk-free interest rate compensates the investor for the temporary sacrifice of consumption.
		Describes return available to an investor in a security somehow guaranteed to produce that return.
	www.comparedefinitions.com /finance/risk-free-interest-rate.html (39 words)

	Real Rates and Gold 2
		Interest rates should be dynamically set in the marketplace by supply and demand forces, the free market, not by decree in smoky backrooms full of private, unelected, and unaccountable central bankers.
		Interest rates define the equilibrium price point where creditors and debtors meet in a free market.
		Because market interest rates are unfortunately pegged to nominal rather than real interest rates, in low interest rate environments the savers can’t get a fair deal so they simply pick up their toys and move to another sandbox.
	www.zealllc.com /2002/realgold2.htm (2990 words)

	Glossary: Risk-Free Rate
		he risk-free rate is a theoretical interest rate at which an investment may earn interest without incurring any risk.
		The notion is used extensively in option pricing theory where derivatives are valued with a risk neutral assumption under which all assets may be assumed to have expected returns equal to the risk-free rate.
		In practice, the risk-free rate is often assumed to be a short-term Treasury rate.
	www.riskglossary.com /articles_old/glossaryriskfreerate.htm (80 words)

	Valhalla Mortgage - Low Interest Rate Residential Mortgage Real Estate Loan Quote Home Refinancing
		Interest Rates are still low, purchase or refinance now and take advantage of the lowest interest rates available.
		Risk of rates being higher at the end of the initial fixed period
		Valhalla Mortgage Corporation is an Internet source for Low Interest Rate Mortgage Loan services, that offers 125% ltv home equity loans, new purchase and refinance mortgages for the financing or refinancing of residential, and commercial real estate properties.
	www.prequal1.net (2358 words)

	On the Relationship Betweem the Market Risk Premium and the Risk-Free Interest Rate
		The lack of integratedness between the risk premium and the risk free rate has implications on the construction of the equity risk premium used in the determination of the required rate of return.
		The objective of this paper is to explore the relationship between the equity risk premium and the risk free rate.
		In contrast, all the measures of the market risk premium are stationary in their levels at the 5 percent level of significance with the exception of Spone, which is linear trend stationary at the 10 percent level.
	www.westga.edu /~bquest/2004/relationship.htm (2930 words)

	Safe Haven Return of the Risk Premium
		The Equity Risk Premium represents the additional return demanded by an investor to own equity over and above what is considered to be a risk free interest rate.
		Therefore, current assumptions about any such eternally lower Equity Risk Premiums ought to be reconsidered… quickly, for it appears that the "invisible hand" is anxious to readjust the ERP all on its own, with or without your help.
		Rising productivity, low inflation, and a structural reduction in the equity risk premium, all apparently owing mainly to the US information technology age, have been the basis of the goldilocks economic theme that has been at the driver's seat of this bull market for most of the past decade.
	www.safehaven.ca /GIC100200.htm (4216 words)

	The Equity Premium and the Risk Free Rate
		This paper investigates the ability of a representative agent model with time separable utility to explain the mean vector and the covariance matrix of the risk-free interest rate and the return to equity.
		The Equity Premium and the Risk Free Rate
		'The Equity Premium and the Risk Free Rate: Matching the Moments,'Journal of Monetary Economics 31 (February 1993) 21-46(with P.-s.
	people.brandeis.edu /~cecchett/equity.htm (193 words)

	The Real Risk-Free Rate of Interest, k*
		The rate of interest that would exist on default-free U. Treasury securities if no inflation were expected
	www.cameron.edu /~sivarama/beschap2/tsld028.htm (29 words)

	Hedged portfolio - Finance and Business
		A portfolio consisting of a long position in the stock and a long position in the put option on the stock, so as to be riskless and produce a return that equals the risk-free interest rate.
	www.financial-terms.co.uk /finance-glossary/hedged-portfolio.html (85 words)

	An Intertemporal Model of Segmentation (Reprint 056)
		Within the model, under various forms of segmentation/integration, the equilibrium asset prices and allocations, the risk-free interest rate, and the intertemporal consumption behavior and welfares of two countries are derived and compared.
		It is shown that the equilibrium interest rate is increased on integration, and that integrating markets may be significantly welfare decreasing for one of the countries.
		Conditions that may lead to a decrease in welfare are investigated.
	www.ideas.uqam.ca /ideas/data/Papers/fthpennfi08-95.html (201 words)

	Model pricing & risk analytics of interest rate cash & derivative products. Fundamental theory of bonds.
		Model pricing and risk analytics of interest rate cash and derivative products.
		Model the pricing and risk analytics of interest rate cash and derivative products.
		Duration - the Duration of a bond, bond portfolio, interest rate future and the rescaling of Duration according to different interest compounding conventions.
	www.ozgrid.com /Services/bonds-j2ee.htm (865 words)

	Merton Option Pricing Formula
		The continuously compounded risk free interest rate is.0293.
		The yield is expressed as an annual continuously compounded rate q.
		The index is trading at EUR 7986 and has 24% (that is.24) implied volatility.
	www.riskglossary.com /articles/merton_1973.htm (477 words)

	The Greenspan Gambit
		The interest rate cut will have zero tangible effect for at least a few months and probably more like six to nine months, and nothing has materially changed from the day before the Greenspan Gambit.
		If low interest rates, rapidly mushrooming cheap credit, and wild-west capital arrangements could stave off a post-bubble bust, the Nikkei would be trading over 100,000 today.
		On January 3, 2001, the FOMC board voted 5-0 to slash the overnight bank lending rate, the fed funds rate, by 50 basis points to 6%, and to carve 25 basis points off the discount rate leaving it at 5.75%.
	www.zealllc.com /commentary/gambit.htm (3486 words)

	Endogenous Risk Structure of Interest Rates (SMEALSearch) - Pal,Rangaswamy,Giles,Debnath
		In this paper we investigate the behavior of credit yield spreads in an equilibrium framework in which the risk-free interest rate and yields on risky debt are jointly and endogenously determined.
		We also examine the effect of stochastic risk-free rates on credit yield dynamics by comparing our model to an economy with a log-normal dividend process and a constant risk-free rate.
		We find that an increase in risk aversion or an increase in uncertainty about growth prospects results in widening yield spreads, as does a worsening of the state of the economy.
	smealsearch2.psu.edu /13686.html (284 words)

	Guaranteed Personal Loan - Hedge fund , Hedgie, Held order , Hell-or-high-water contract , Hedged portfolio
		riskless and produce a return that equals the risk-free interest rate.
		Your home is at risk if you do not keep up repayments on a mortgage or other loan secured on it.
		A transaction that reduces the risk of an investment.
	www.guaranteed-personal-loan.co.uk /glossary131.html (379 words)

	On the Range of the Risk-Free Interest Rate in Incomplete Markets (SMEALSearch) - Pal,Rangaswamy,Giles,Debnath
		In a model of a two-period exchange economy under uncertainty, we find both upper and lower bounds for the risk free interest rate when the agents' utility functions exhibit constant absolute risk aversion.
		These bounds are independent of the degree of market incompleteness, and so in particular these results show to what extent market incompleteness can explain the risk-free rate puzzle in this class of general equilibrium models with heterogeneous agents.
		Keywords: The risk-free rate puzzle, constant absolute risk aversion, incomplete markets, general equilibrium.
	smealsearch2.psu.edu /89768.html (260 words)

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