Compounding period

Similar financial terms

Compounding
The process of accumulating the time value of money forward in time. For example, interest earned in one period earns additional interest during each subsequent time period.

Compounding frequency
The number of compounding periods in a year. For example, quarterly compounding has a compounding frequency of 4.

Continuous compounding
The process of accumulating the time value of money forward in time on a continuous, or instantaneous, basis. Interest is earned continuously, and at each instant, the interest that accrues immediately begins earning interest on itself.

Workout period
Realignment period of a temporary misaligned yield relationship that sometimes occurs in fixed income markets.

Annualized holding period return
The annual rate of return that when compounded t times, would have given the same t-period holding return as actually occurred from period 1 to period t.

Waiting period
Time during which the SEC studies a firm's registration statement. During this time the firm may distribute a preliminary prospectus.

T-period holding-period return
The percentage return over the T-year period an investment lasts.

Subperiod return
The return of a portfolio over a shorter period of time than the evaluation period.

Neutral period
In the Euromarket, a period over which Eurodollars are sold is said to be neutral if it does not start or end on either a Friday or the day before a holiday.

Net period
The period of time between the end of the discount period and the date payment is due.

Multiperiod immunization
A portfolio strategy in which a portfolio is created that will be capable of satisfying more than one predetermined future liability regardless if interest rates change.

Credit period
The length of time for which the customer is granted credit.

Grace period
The time period stipulated in most loan contracts and insurance policies in which a late payment will not result in default or cancellation.