Term structure of interest rates and volatility

• Refers to the variability of short-term rates relative to longer-term rates. It has been documented that short-term rates exhibit greater variability or volatility than long-term rates. However, longer-term instruments experience greater price sensitivity than short-term instruments for a given change in the underlying rate. A quick measure of this price sensitivity is provided by duration. Typically, debt instruments without option features, explicit or implicit, have greater duration with longer maturities. Zero coupon securities tend to have the greater price sensitivity relative to coupon paying securities. See Duration.


Follow this link for all the terms related to interestrateterm.

 Embedded terms in definition
Debt instrument
 Related Terms
Accrued interest
Amortizing interest rate swap
Base interest rate
Benchmark interest rate
Capital structure
Capitalized interest
Cash flow after interest and taxes
Cca rates
Compound interest
Compounded interest
Cost of long term debt
Covered interest arbitrage
Cross rates
Earnings before interest and taxes
Effective annual interest rate
Effective interest rate international context
Equilibrium rate of interest
Euro medium term note
Expectations theory of forward exchange rates
Expected volatility
Financial structure
Forward interest rate
Future value interest factor
Future value interest factor for an annuity
Gross interest
Guaranteed investment interest contract
Historic volatility
Implied volatility
Indication of interest
Interest calculations and related formulas
Interest compounded annually
Interest compounded continuously
Interest coverage
Interest coverage ratio
Interest coverage test
Interest discounted annually present value of reversion
Interest discounted continuously
Interest equalization tax
Interest equivalent factor
Interest impact on accumulation of 1 per period
Interest impact on instalment to amortize or amortization
Interest impact on present value of ordinary annuity of 1 per period
Interest impact on sinking fund factor
Interest on interest
Interest only
Interest only strip
Interest payments
Interest rate
Interest rate agreement
Interest rate buydowns
Interest rate cap
Interest rate ceiling
Interest rate exposure
Interest rate floor
Interest rate on debt
Interest rate parity theorem
Interest rate risk
Interest rate risk management
Interest rate swap
Interest subsidy
Interest tax shield
Intermediate term
Liquidity theory of the term structure
Long term
Long term assets
Long term care ltc insurance
Long term debt
Long term debt ratio
Long term debt to capitalization
Long term debt to equity ratio
Long term debt/capitalization
Long term financial plan
Long term financing
Long term liabilities
Long term strategic financial plans
Medium term notes
Minority interest
Multiple rates of return
Net interest margin
Nominal interest rate
Nominal interest rate international context
Nominal rate of interest
Open interest
Optimal capital structure
Other long term liabilities
Pecking order view of capital structure
Perfect market view of capital structure
Personal tax view of capital structure
Pie model of capital structure
Present value interest factor
Present value interest factor for an annuity
Pro forma capital structure analysis
Rate of interest
Real exchange rates
Real interest rate
Real rate of interest
Reward to volatility ratio
Secured short term financing
Short interest
Short term debt
Short term financial management
Short term financial plan
Short term investment services
Short term operating financial plans
Short term self liquidating loan
Short term solvency ratios
Short term tax exempts
Simple interest
Spot interest rate
Stated annual interest rate
Static theory of capital structure
Swap interest rate
Target capital structure
Term bond
Term fed funds
Term insurance
Term life insurance
Term loan
Term loan agreement
Term long term loan
Term premiums
Term repo
Term structure
Term structure of interest rates
Term to maturity
Term trust
Times interest covered
Times interest earned ratio
True interest cost
Unsecured short term financing
Volatility risk
Volatility trades

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