2019 - Sensitivity of an interest rate | Information - what is it?

That is 'sensitivity of the Interest rate' Information:

Sensitivity of an interest rate - a measure of, as far as the price of an asset of the fixed income will fluctuate as a result of changes in environment of an interest rate. Securities which are more sensitive, have big price fluctuations, than those with smaller sensitivity. This type of sensitivity has to be taken into account, choosing communication or other tool of the fixed income which the investor can sell in the secondary market.

2019 - Sensitivity of an interest rate

Sensitivity of an interest rate, Information - 2019

Similar questions:

DESTRUCTION of 'sensitivity of an interest rate' Information:

Sensitivity of an interest rateUsually, than more long an asset maturity, especially a sensitive asset to changes in interest rates. Changes in interest rates are observed close to dealers in the bond and the fixed income as the turning-out price fluctuations affect a full crop of securities. Investors who understand concept of duration, can immunize the briefcases of the fixed income to changes in short-term interest rates.

The return correlation between the fixed income and rates

Sensitivity of an interest rateSecurities of the fixed income and interest rates are in inverse proportion correlated. Therefore when interest rates raise, the prices of securities of the fixed income tend to fall. One way to define how interest rates mention a briefcase of safety of the fixed income, consists in determining duration. Than duration of bonded or bonded fund, especially sensitive bonded or bonded fund to changes in interest rates is higher. Duration of securities of the fixed income adumbrates to investors of sensitivity to potential changes of an interest rate. Duration - a good measure of sensitivity of an interest rate because calculation includes repeated features of communication, such as coupon payments and a maturity.

Types of measurements of duration

Sensitivity of an interest rateThere are four widely used measurements of duration to define sensitivity of an interest rate of safety of the fixed income: Macaulay's duration, the changed duration, effective duration and duration of a key interest rate. To calculate Macaulay's duration, time by a maturity, number of streams of cash, a necessary crop, payment of a stream of cash, face value and price of bonds has to be known. The changed duration - the changed calculation of duration of Macaulay. It defines, how many duration would change for each change of percentage point in a crop. Effective duration is used to calculate duration of communications with the enclosed options. It defines approximate price decrease for communication if interest rates increase instantly by 1 percent's . Duration of a key interest rate defines safety of the fixed income or duration of a briefcase of the fixed income in a certain maturity on curve profitability.

Sensitivity of an interest rateOne widely used measure to define sensitivity of an interest rate is effective duration. For example, assume that the bonded fund holds 100 communications with average duration of nine years and with an average effective duration of 11 years. Therefore if interest rates increase instantly by 1 percent's , bonded fund as expect, will lose 11 percent's based on its effective duration.

Sat, 23 Mar 2019 18:49 GMTPatriots' Robert Kraft apologizes to family, friends in first statement since prostitution chargesSat, 23 Mar 2019 16:24 GMTFailed Alzheimer's trial leaves families and patients heartbroken. Medical community reelsSat, 23 Mar 2019 14:55 GMTProsecutors reportedly probe whether Boeing misled regulators about safety of 737 Max jetsSat, 23 Mar 2019 12:48 GMTHow a premature ejaculation drug sparked a $150 million legal battle over trade secretsSat, 23 Mar 2019 00:02 GMTCramer Remix: Apple could decline, no matter what new products it announces on MondayFri, 22 Mar 2019 22:36 GMTCramer: I'm skeptical about Lyft as a longer-term investmentFri, 22 Mar 2019 22:31 GMTCramer's game plan: 'Get ready to ride through these troubled waters'Fri, 22 Mar 2019 22:07 GMTPinterest must spend at least $750 million on AWS through mid-2023Fri, 22 Mar 2019 21:20 GMTPinterest's IPO filing shows how powerful Google has becomeFri, 22 Mar 2019 20:24 GMTPinterest files to go public: Booked $756 million last year and claims 250 million monthly usersFri, 22 Mar 2019 19:42 GMTTyson recalling nearly 70,000 pounds of chicken strips after a report of metal piecesFri, 22 Mar 2019 19:20 GMTVideo-conferencing company Zoom files for IPO with over $300 million in sales and even a profitFri, 22 Mar 2019 18:55 GMTTim Cook reportedly met with a Chinese official as he tours the country ahead of Apple's big eventFri, 22 Mar 2019 18:06 GMTCowen lowers Tesla price target to $180 and says Model 3 deliveries could be weaker than expectedFri, 22 Mar 2019 15:11 GMTHumana turns to game theory for new Medicare pricing as insurers juggle Trump rebate uncertaintyFri, 22 Mar 2019 15:10 GMTJordan Peele's 'Us' has all the makings of a best picture contender except that it's a horror movieFri, 22 Mar 2019 14:25 GMTUber faces fresh legal challenge over driver dataFri, 22 Mar 2019 14:01 GMTGeneral Motors invests $300 million in Orion Assembly Plant, adds 400 jobsFri, 22 Mar 2019 13:39 GMTTesla brings back its referral program, sort ofFri, 22 Mar 2019 13:35 GMTTesla Gigafactory employees lined up for 'Merch Madness,' a chance to buy company swag on the cheapFri, 22 Mar 2019 13:05 GMTNike shares are falling as the sneaker maker warns of a sales slowdownFri, 22 Mar 2019 12:57 GMTBiogen stock plunge shows 'investment model in drug development is all wrong,' says former Aetna CEOFri, 22 Mar 2019 12:25 GMTNew York Times CEO warns publishers on the dangers of partnering with AppleFri, 22 Mar 2019 12:25 GMTShaquille O'Neal joins Papa John's board as it works to repair its imageFri, 22 Mar 2019 11:01 GMTTiffany shares bounce back as CEO touts growth opportunitiesFri, 22 Mar 2019 10:46 GMTEisai starts trials for a second Alzheimer's drug a day after Biogen failure wiped $18B off its valueFri, 22 Mar 2019 07:31 GMTDow drops more than 450 points, S&P 500 posts worst day since January amid global growth worriesFri, 22 Mar 2019 06:40 GMTEuropean stocks close week sharply lower on weak European dataThu, 21 Mar 2019 23:17 GMTCramer Remix: Levi's stock is too rich to buy after its high-flying IPOThu, 21 Mar 2019 22:38 GMTCVS Health CEO on reducing costs: Billions in value opportunity is 'in front of us'

Warning About Refusal! The information on our website may be out-of-date and not official. For more information, please visit the Bank's official website.
For credit, insurance and account opening issues, please contact the Bank's consultant by phone. Thank you for using our site.

If we don 't have accurate information or it is out-of-date, please notify us by E-mail.

Leave your comment or question: