**Interest rate swap** — An interest rate swap is a derivative in which one party exchanges a stream of interest payments for another party s stream of cash flows. Interest rate swaps can be used by hedgers to manage their fixed or floating assets and liabilities. They… … Wikipedia

**Fixed interest** — A fixed interest rate loan is a loan where the interest rate doesn t fluctuate during the fixed rate period of the loan. This allows the borrower to accurately predict their future payments. Variable rate loans, by contrast, are anchored to the… … Wikipedia

**Interest Rate Swap** — An agreement between two parties (known as counterparties) where one stream of future interest payments is exchanged for another based on a specified principal amount. Interest rate swaps often exchange a fixed payment for a floating payment that … Investment dictionary

**Interest-Rate Derivative** — A financial instrument based on an underlying financial security whose value is affected by changes in interest rates. Interest rate derivatives are hedges used by institutional investors such as banks to combat the changes in market interest… … Investment dictionary

**interest rate** — The monthly effective interest rate. For example, the periodic rate on a credit card with an 18% annual percentage rate is 1.5% per month. Bloomberg Financial Dictionary * * * interest rate ˈinterest ˌrate noun [countable] FINANCE the percentage… … Financial and business terms

**Interest Rate Call Option** — An interest rate derivative in which the holder has the right to receive an interest payment based on a variable interest rate, and then subsequently pays an interest payment based on a fixed interest rate. If the option is exercised, the… … Investment dictionary

**interest rate swap** — noun A contract to exchange the benefit of one interest rate with another. Often a fixed interest rate being exchanged for a variable rate so as to allow one party to remove an exposure to a variable rate for which they pay a premium on the fixed … Wiktionary

**Fixed Exchange Rate** — A country s exchange rate regime under which the government or central bank ties the official exchange rate to another country s currency (or the price of gold). The purpose of a fixed exchange rate system is to maintain a country s currency… … Investment dictionary

**Interest rate cap and floor** — Interest rate c An interest rate cap is a derivative in which the buyer receives payments at the end of each period in which the interest rate exceeds the agreed strike price. An example of a cap would be an agreement to receive a payment for… … Wikipedia

**Interest rate risk** — is the risk (variability in value) borne by an interest bearing asset, such as a loan or a bond, due to variability of interest rates. In general, as rates rise, the price of a fixed rate bond will fall, and vice versa. Interest rate risk is… … Wikipedia