Sentences with phrase «similar interest rate risk»

These bonds, however, all face similar interest rate risk.

Not exact matches

The risk - free interest rate approximates the yield on benchmark Government of Canada bonds for terms similar to the contract life of the options.

In fact, if you don't hold bonds to maturity, you may experience similar interest - rate risk as a comparable - duration bond fund.

But if the average duration for these two funds is similar, then surely they both risk capital losses from higher interest rates?

One option for investors seeking to reduce their interest rate risk and increase yield, while still maintaining the overall risk profile similar to a traditional Canadian bond portfolio is the iShares Short Term Strategic Fixed Income ETF (XSI), which seeks to deliver a higher yield with reduced interest rate sensitivity.

The mortgage interest rate is determined by supply and demand, perceived risk of similar investments, and the general health of the overall economy.

The collateral and leverage are similar; the main difference is that Deerfield uses swaps and floors to manage interest rate risk, and Annaly uses longer repo terms (1 - 3 years) than Deerfield (0 - 3 months).

What makes the answer to your question fairly straight forward even without Dutch - specific knowledge is that your mortgage interest rate of 2.3 % is similar to the returns you could get with risk - averse investments in European markets.

The bank will regain the collateral of your house, meaning you are a low risk for them, and they will give you money at an interest rate generally similar to if you were just buying it new.

Finally, I've also added «real return bonds» to the portfolio — as I understand it, they are very similar to the «broad bonds,» but with a different mix of interest - rate vs. inflation risk.

To do that, you need to look at corporate bond funds with a similar duration, which is a measure of sensitivity to interest rate risk.

This risk of Interest Rate change is when your investment is parked in a Fixed Deposit or Corporate Deposit at the highest available interest rate (Currently above 9.50 %) and there are no avenues to reinvest the realised amount with a similar or higher interest rate (For example if your interest is paid out after 1 year and the prevailing interest rate is 8 % at thInterest Rate change is when your investment is parked in a Fixed Deposit or Corporate Deposit at the highest available interest rate (Currently above 9.50 %) and there are no avenues to reinvest the realised amount with a similar or higher interest rate (For example if your interest is paid out after 1 year and the prevailing interest rate is 8 % at that tRate change is when your investment is parked in a Fixed Deposit or Corporate Deposit at the highest available interest rate (Currently above 9.50 %) and there are no avenues to reinvest the realised amount with a similar or higher interest rate (For example if your interest is paid out after 1 year and the prevailing interest rate is 8 % at thinterest rate (Currently above 9.50 %) and there are no avenues to reinvest the realised amount with a similar or higher interest rate (For example if your interest is paid out after 1 year and the prevailing interest rate is 8 % at that trate (Currently above 9.50 %) and there are no avenues to reinvest the realised amount with a similar or higher interest rate (For example if your interest is paid out after 1 year and the prevailing interest rate is 8 % at thinterest rate (For example if your interest is paid out after 1 year and the prevailing interest rate is 8 % at that trate (For example if your interest is paid out after 1 year and the prevailing interest rate is 8 % at thinterest is paid out after 1 year and the prevailing interest rate is 8 % at thinterest rate is 8 % at that trate is 8 % at that time)

It gives you the opportunity to earn rates of interest similar to those of long - term Government securities with no risk of loss of principal.

In essence, we facilitate lending among our members, creating a situation where both parties benefit: Borrowers pay lower interest rate than they would on their credit cards or similar unsecure loans, while Lenders receive the interest the borrowers pay at higher rates than other investment opportunities of comparable risk (stated interest rates of 6.69 % -19.37 % after service charge) How many loans have you done (and for what amount)?

However, like mutual funds, they carry similar market risks to their underlying securities so they'll be subject to forces such as interest rate changes, geopolitics and industry trends.

Given similar credit profiles, a shorter maturity security will generally pay you a lower interest rate, but you'll be taking on less risk than if you invested in a longer dated bond that should pay a higher yield.

Since you are simply replacing a mortgage that you have already been making payments on, this is considered the lowest risk of the 3 types of refinances and therefore will typically have lower interest rates than equivalent cash - out or debt consolidation refinances and follow similar Loan - To - Value requirements to purchase transactions.

The fact that MBS investors are exposed to downside prepayment risk, but rarely benefit from it, means that these bonds must pay an incrementally higher interest rate than similar bonds without prepayment risk, to be attractive investments.

I took a similar approach with my ~ 6 + year maturity MUNI fund when I paid off our fixed 3.5 % mortgage (reducing interest rate risk on longer maturity bond holdings).

It is another way to measure interest - rate risk, similar to duration which measures the percent change in a bond price given a 1 % change in rates.

According to the following article: Bonds offering lower coupon rates generally will have higher interest rate risk than similar bonds that offer higher coupon rates.

Let's say Darryl buys a newly issued five - year bond with a face value of $ 1,000 and an interest rate (or coupon, as it's called) of 3 %, which is the prevailing rate for five - year bonds with similar risk.

In general, fixed Income ETFs carry risks similar to those of bonds, including interest rate risk (as interest rates rise bond prices usually fall, and vice versa), issuer or counterparty default risk, issuer credit risk, inflation risk and call risk.

Home equity lines of credit are secured by your home, which lowers the risk for the bank and allows them to offer you a low interest rate, similar to a mortgage.

Since short - and intermediate - term TIPS, as well as the floating - rate loans and the ABS / CMBS swapped for CPI, receive the same inflation adjustment as other, longer - dated inflation - linked securities, they may be able to provide similar protection from inflation, but with less interest rate risk.

This latter portfolio is «designed to hedge the major risks of the liabilities — namely, inflation and interest rates — and utilizes assets which exhibit behavior similar to that of the Plan's liabilities.»

Similarly, our 1 - 12 Year National and California Ladders have the potential to benefit from reduced investor demand for maturities beyond 10 years, and our 1 - 18 year ladders may provide similar yields to 20 - year ladders with lower interest rate risk.

mREITs seek to hedge prepayment risk using similar tools and techniques as those they use to hedge against interest rate risks.

Any look back to around 1998 - 2000 when interest rates were higher (and important to note, inflation was low even though rates were high) shows that other investments of similar risk were pulling in 7 - 8 % easy.

The lender's interest rate offer must be generally available to all of its customers who share a similar credit risk profile (so that employee - discount programs or other special, limited lending programs would not qualify).

Price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to a change in market prices (other than those arising from interest rate risk or currency risk), whether those changes are caused by factors specific to the individual financial instrument or its issuer, or factors affecting similar financial instruments traded in the market.

Thus, an investment in a hybrid may entail significant market risks that are not associated with a similar investment in a traditional, U.S. dollar - denominated bond that has a fixed principal amount and pays a fixed rate or floating rate of interest.