The neutral rate of interest, previously called the natural rate of interest, is the real (net of inflation) interest rate that supports the economy at...

The real interest rate is the rate of interest an investor, saver or lender receives (or expects to receive) after allowing for inflation. It can be described...

without the use of a forward contract to hedge against exposure to exchange rate risk, interest rate parity is said to be uncovered. Risk-neutral investors...

evidence of compound interest dates roughly 2400 BC. The annual interest rate was roughly 20%. Compound interest was necessary for the development of agriculture...

In the United States, the federal funds rate is the interest rate at which depository institutions (banks and credit unions) lend reserve balances to...

have to have a higher rate of return in order to induce any investors to hold it. In practice, to infer the risk-free interest rate in a particular currency...

A short-rate model, in the context of interest rate derivatives, is a mathematical model that describes the future evolution of interest rates by describing...

portfolio price P(0) is the expected value of C under the risk-neutral probabilities. If the interest rate R were not zero, we would need to discount...

associated with it. It explains that the neutral rate of interest is the hypothetical, single rate of originary interest that would prevail in an imaginary...

consist of just one asset), as well as to interest rate modeling in general, where yield curves must be arbitrage free with respect to the prices of individual...

actually a vertical line indicating the natural rate of unemployment. According to Friedman, money was not neutral in the short run, because economic agents...

driven by the short end (under risk-neutral equivalent martingale measure) and accordingly by short-term interest rates. The mathematical model for Vasicek's...

present value of the future cash flows is equal to the initial investment, and it is also the interest rate at which the total present value of costs (negative...

explained this rapid rate of mutation by suggesting that the majority of mutations were neutral, i.e. had little or no effect on the fitness of the organism....

Interest rate targeting is generally the primary tool, being obtained either directly via administratively changing the central bank's own interest rates...

evolution of interest rates. It is a type of one-factor short-rate model as it describes interest rate movements as driven by only one source of market risk...

SARON stands for Swiss Average Rate Overnight and is a measurement of the overnight interest rate of the secured funding market denominated in Swiss Franc...

or interest rate etc.). The position is then established such that a change in the value of the protected-asset, is offset by a change in value of the...

Gender neutrality (adjective form: gender-neutral), also known as gender-neutralism or the gender neutrality movement, is the idea that policies, language...

short-rate model used in the pricing of bond options, swaptions and other interest rate derivatives; see Lattice model (finance) § Interest rate derivatives...

the risk-neutral measure. The forward measure and the risk neutral measure are the same when interest rates are deterministic. Forward rate Forward measure...

return (instead replacing the security's expected return with the risk-neutral rate). The equation and model are named after economists Fischer Black and...

delineated aside. The most common transactions attracting CVA involve interest rate derivatives, foreign exchange derivatives, and combinations thereof...

money rate of interest. The money rate of interest, to Wicksell, is the interest rate seen in the capital market; the natural rate of interest is the...

of the nominal money supply or the rate of inflation. An economy exhibits the classical dichotomy if money is neutral, affecting only the price level, not...

from each other. For example, some standards for carbon neutral certification allow a lot of carbon offsetting. But net zero standards require reducing...

energy, precious metals, foreign currency, and interest rate fluctuations. Hedging is the practice of taking a position in one market to offset and balance...

substitutes. Only risk neutral investors are in the system. The demand for money therefore depends only on income and the interest rate, and investment depends...

prices instead of rates, as prices are more readily available. Per the logic outlined, rational pricing applies also to interest rate modeling more generally...

fiscal measures. Government debt accumulation may lead to a rising interest rate, which can crowd out private investment as governments compete with...