Search results
Results From The WOW.Com Content Network
Coupon leverage, or leverage factor, is the amount by which a reference rate is multiplied to determine the floating interest rate payable by an inverse floater. [1] Some debt instruments leverage the particular effects of interest rate changes, most commonly in inverse floaters. [2]
Closely related to leveraging, the ratio is also known as risk, gearing or leverage. The two components are often taken from the firm's balance sheet or statement of financial position (so-called book value ), but the ratio may also be calculated using market values for both, if the company's debt and equity are publicly traded , or using a ...
Using the factor rate provided by the lender, you can quickly calculate the cost of the borrowed funds. For example, if you borrowed $100,000 with a factor rate of 1.5, multiply those two figures ...
The reason for the change is that, post-crisis, the overnight rate is the rate paid on the collateral (variation margin) posted by counterparties on most CSAs. The forward values of the overnight rate can be read from the overnight index swap curve. "OIS-discounting" is now standard, and is sometimes, referred to as "CSA-discounting".
Partial leverage (PL) is a measure of the contribution of the individual independent variables to the total leverage of each observation. That is, PL is a measure of how h i i {\displaystyle h_{ii}} changes as a variable is added to the regression model.
On-balance sheet netting of loans and deposits of a bank to a corporate counterparty is permitted to reduce the estimate of EAD under certain conditions. For off-balance sheet items, there are two broad types which the IRB approach needs to address: transactions with uncertain future drawdown, such as commitments and revolving credits , and OTC ...
Factor investing is an investment approach that involves targeting quantifiable firm characteristics or "factors" that can explain differences in stock returns. Security characteristics that may be included in a factor-based approach include size, low-volatility , value , momentum , asset growth, profitability, leverage, term and carry .
Leverage is defined as the ratio of the asset value to the cash needed to purchase it. The leverage cycle can be defined as the procyclical expansion and contraction of leverage over the course of the business cycle. The existence of procyclical leverage amplifies the effect on asset prices over the business cycle.