This means dividing the potential interest rate shock (in this case $ 329) by the length of your mortgage term (in this case five years) to determine how much you should add to your payments each year ($ 329/5 = $ 65.80). (moneysense.ca)
«What the inflation hedge does is spread that interest rate shock over the five years of your mortgage term, which helps absorb the payment shock,» explains Nawar. (moneysense.ca)
The change in yield is determined as follows: After one year, what was originally an «x» year bond will be an «x» -1 year bond with a yield equal to the original «x» -1 year yield, plus or minus any yield change applied from the model's Interest Rate Shock inputs. (funds.eatonvance.com)