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Any money that Richard invested on Jan. 1 grew by 10% at the end of the year, but his specific pattern of investments led to an overall loss of 0.01%, his dollar-weighted return.
The BPV in the table is the dollar change in price for $100 notional for 100bp change in yields. The BPV will make sense for the interest rate swap (for which modified duration is not defined) as well as the three bonds. Modified duration measures the size of the interest rate sensitivity.
WAL should not be confused with the following distinct concepts: Bond duration Bond duration is the weighted-average time to receive the discounted present values of all the cash flows (including both principal and interest), while WAL is the weighted-average time to receive simply the principal payments (not including interest, and not discounting).
The time value of money is reflected in the interest rate that a bank offers for deposit accounts, and also in the interest rate that a bank charges for a loan such as a home mortgage. The "risk-free" rate on US dollar investments is the rate on U.S. Treasury bills, because this is the highest rate available without risking capital.
One of the many variables lenders use when deciding whether or not to loan you money is your debt-to-income ratio or DTI. Your DTI reveals how much debt you owe compared to the income you earn ...
To calculate your front-end ratio, add up your monthly housing expenses only, divide that by your gross monthly income, then multiply the result by 100. It would come to 30 percent: 1,800 6,000 x ...
Net interest income (NII) [1] is the difference between revenues generated by interest-bearing assets and the cost of servicing (interest-burdened) liabilities. For banks , the assets typically include commercial and personal loans, mortgages, construction loans and investment securities.
However, if you have a large amount of debt or a high credit utilization ratio — meaning your accounts are maxed out — your score may be negatively impacted even if your DTI is proportionately ...