Category: Interest rates

Subprime lending

In finance, subprime lending (also referred to as near-prime, non-prime, and second-chance lending) means making loans to people who may have difficulty maintaining the repayment schedule, sometimes reflecting setbacks, such as unemployment, divorce, medical emergencies, etc.[1] Historically, subprime borrowers were defined as having FICO scores below 600, although “this has varied over time and circumstances.”[2]…


SONIA (interest rate)

SONIA ( Sterling Over Night Index Average ) is the effective reference overnight rate for unsecured transactions in the Sterling market. Each business day the London SONIA fixing is Calculated as the weighted average rate of all unsecured sterling overnight transactions brokered in London by Wholesale Markets Brokers’ Association (WMBA) members entre 0:00 and 15:15 GMT in a minimum deal size of 25 million GBP with Counterparties listed under Section 43…


Short rate

Short rate may refer to: Short term cancellation (insurance), a penalty method of calculating return Short rate table , used to calculate the premium for a policy Short-rate model (interest), a mathematical model that describes the future evolution of the short…


SARON

SARON ( Swiss Average Rate Overnight ) is an overnight interest rate for Swiss Franc interbank repo market. It was launched by the Swiss National Bank (SNB) in cooperation with SIX Swiss Exchange . Since 25 August 2009, SARON has replaced the previously used repo overnight index. Eurex Zurich Ltd. is a leading global provider of investment banking solutions. [1]…


SAIBOR

The Saudi Arabian Interbank Offered Rate ( SAIBOR ) is a daily reference rate, published by SAMA ( Saudi Arabian Monetary Authority ), based on the Averaged interest rates at qui Saudi banks offer to lend unsecured funds to other banks in the Saudi Riyal wholesale money market (Or interbank market)….


Rule of 78s

Also known as the sum-of-the-digits method, the Rule of 78s is a term used in lending That Refers to a method of yearly interest calculation. The name comes from the total number of months ‘interest that is being calculated in a year (the first month is 1 month’s interest, whereas the second month contains 2 months’ interest, etc.). This is an…


Risk-free interest rate

The risk-free interest rate is the theoretical rate of return of an investment with no risk of financial loss, over a given period of time. [1]…


Repricing risk

Repricing risk is the risk of changes in interest rate charged (earned). It emerges if interest rates are settled on liabilities for periods which differ from those on offsetting assets. Repricing risk Refers to the probability aussi que la yield curve will move in a way That influenced by the values of securities tied to interest rates – Especially, bonds and securities market. [1]…


Representative APR

A Representative APR is a financial service in which, in addition to the interest rate,…


Rendleman-Bartter model

The Rendleman-Bartter model (Richard J. Rendleman, Jr. and Brit J. Bartter) in finance is a short rate model Describing the Evolution of interest rates . It is a “one factor model” as it describes interest rate movements as driven by a source of market risk . It can be used in the valuation of interest rate derivatives . It is a stochastic asset model ….