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In economics, a liquidity premium is the explanation for a difference between two types of financial securities (e.g. stocks), that have all the same qualities except liquidity. [1] It is a segment of a three-part theory that works to explain the behavior of yield curves for interest rates. The upwards-curving component of the interest yield ...
In finance, a price (premium) is paid or received for purchasing or selling options.This article discusses the calculation of this premium in general. For further detail, see: Mathematical finance § Derivatives pricing: the Q world for discussion of the mathematics; Financial engineering for the implementation; as well as Financial modeling § Quantitative finance generally.
In Finance, CAPM is generally used to estimate the required rate of return for an equity. This required rate of return can then be used to estimate a price for the stock which can be done via a number of methods. [12] The formula for CAPM is: CAPM = (The Risk Free Rate) + (The Beta of the Security) * (The Market Risk Premium) [13]
Security market line (SML) is the representation of the capital asset pricing model. It displays the expected rate of return of an individual security as a function of systematic, non-diversifiable risk. The risk of an individual risky security reflects the volatility of the return from the security rather than the return of the market ...
A mortgage-backed security (MBS) is an investment product that consists of thousands of individual mortgages. Investors can purchase MBSs on the secondary market and directly from the issuer. When ...
According to Companies Act 2006 s.610 [2] in the United Kingdom the share premium account may be used only for certain specific purposes. However, UK company law in this connection was significantly relaxed in 2008 by permitting the share premium account to be converted into share capital and then the share capital to be reduced (effectively allowing the elimination of the share premium ...
In finance, an on-the-run security or contract is the most recently issued, and hence most liquid, of a periodically issued security. On-the-run securities are generally more liquid and trade at a premium to other securities. Other, older issues are referred to as off-the-run securities, and trade at a discount to on-the-run securities.
Premium financing is the lending of funds to a person or company to cover the cost of an insurance premium.Premium finance loans are often provided by a third party finance entity known as a premium financing company; however insurance companies and insurance brokerages occasionally provide premium financing services through premium finance platforms.