Dirk Cotton gives a good argument that this is not the case because duration measures the expected change in value for only very
small changes in interest rates.
Which means we're hugely sensitive to
small changes in interest rates.
It can help you determine how much you could pay in interest with
a small change in interest rate.
This means that Bond B is more volatile than Bond A, given
a smaller change in interest rates will impact its price to a greater extent.
The big boys worry that even
a small change in interest rates will weigh the economy down.
Not exact matches
Measured across all loan products, and taking into account
changes in customer risk margins, however, it seems that
interest rates paid on average by
small businesses have increased by a little less than the rise
in interest rates directly due to the tightening of monetary policy.
Joel Prakken, chairman of Macroeconomic Advisers, said any
change in interest rates would probably be
small and not felt for several years.
Even a
small change in your mortgage
rate could lower your monthly payment, and greatly reduce the total
interest you pay during your loan term.
Short - term bonds have
smaller durations and are,
in turn less sensitive to
changes in the
interest rates.
A seemingly
small change in your credit
rating can qualify or disqualify you for decreased
rates of
interest.
And also if you and me are banks, you are bigger and I'm
smaller and our
interest rates are same I won't talk about any
changes in interest rate as I want max profit.
With reverse mortgage loans, a fixed
interest rate will usually result
in a
smaller total loan amount, however the
interest rate will not
change and an accurate projection can be made of the total cost of the loan.
In the same way, if the
interest rate on your
small business credit card is increasing, see about making a
change.
However, due to their short duration, any
change in market
interest rates would have a relatively
small market risk effect on T - bill prices.
While this is true of any U.S. dollar denominated investment, at current low
interest rates even a
small change in the exchange
rate can eliminate the gains from
interest income.
With reverse mortgage loans, a fixed
interest rate will usually result
in a
smaller total loan amount, however the
interest rate will not
change and an accurate projection can be made of the total cost of the loan.
This difference
in the energy and transportation components of affordability swamps the difference
in costs that result from
small changes in mortgage
interest rates.
Data released today by the Federal Housing Finance Agency (FHFA) show that
interest rates on mortgages for new homes declined
in September, but the
changes were very
small.