Sentences with phrase «riskless rate»

The equity risk premium is the higher return an investor receives, above the so - called riskless rate.

It would have almost no impact on U.S. interest rates, except to the extent perhaps of a slight narrowing of credit spreads to balance a slight increase in riskless rates.

Not exact matches

The next step is to assume what the interest rate will be on riskless alternatives.

F (0, T) = S (0) exp -LSB-(r + c - y) T] where F (0, T) = the futures price today for delivery at time T; S (0) = the spot price today; r = the riskless interest rate, expressed in continuous time; c = the cost of physical storage per unit time, expressed in continuous time; y = the convenience yield, expressed in continuous time.

Monetary finance isn't riskless, Mr. Turner says, but the alternatives may be worse: stagnation and deflation, or perpetually low interest rates that fuel dangerous bubbles: «The money finance option should not be excluded as taboo.»

Here, the forward price represents the expected future value of the underlying discounted at the risk free rate — as any deviation from the theoretical price will afford investors a riskless profit opportunity and should be arbitraged away.

The difference between the required rate of return on a riskless asset with the same expected life.

If you choose not to buy stocks, your immediate option is to put your money in bonds and the base rate that drives the bond market is the yield on a riskless (or close to riskless) investment.

The 30 year treasury rate shows the return investors are willing to take in a «riskless» 30 year investment.