Interest period: Difference between revisions
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The period between interest payments on an interest-bearing a financial instrument. Common ones: annual and semi annual (especially for [[fixed rate]] products, since QED the [[interest rate]] doesn’t periodically change so there’s no particular [[market risk]]<ref>Yes, yes, yes, I know: there is a ''[[credit risk]]'' consequence.</ref> consequence for paying [[interest]] more frequently, and operationally it is a hassle); quarterly, monthly, weekly and daily ([[floating rate]] products, which are [[path-dependent]] and more susceptible to intra-period [[volatility]]). | {{g}}The period between interest payments on an interest-bearing a financial instrument. Common ones: annual and semi-annual (especially for [[fixed rate]] products, since [[QED]] the [[interest rate]] doesn’t periodically change so there’s no particular [[market risk]]<ref>Yes, yes, yes, I know: there is a ''[[credit risk]]'' consequence.</ref> consequence for paying [[interest]] more frequently, and operationally it is a hassle); quarterly, monthly, weekly and daily ([[floating rate]] products, which are [[path-dependent]] and more susceptible to intra-period [[volatility]]). | ||
Also described (especially by [[ISDA]] types) as a “[[calculation period]]”, although that is of course a more general term which can refer to other, non-interest-related determinations. | Also described (especially by [[ISDA]] types) as a “[[calculation period]]”, although that is of course a more general term which can refer to other, non-interest-related determinations. | ||
Latest revision as of 11:05, 31 August 2020
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The period between interest payments on an interest-bearing a financial instrument. Common ones: annual and semi-annual (especially for fixed rate products, since QED the interest rate doesn’t periodically change so there’s no particular market risk[1] consequence for paying interest more frequently, and operationally it is a hassle); quarterly, monthly, weekly and daily (floating rate products, which are path-dependent and more susceptible to intra-period volatility).
Also described (especially by ISDA types) as a “calculation period”, although that is of course a more general term which can refer to other, non-interest-related determinations.
See also
References
- ↑ Yes, yes, yes, I know: there is a credit risk consequence.