Stopping curve
A curve showing the refunding rates for different points in time at which the expected value of refunding immediately equals the expected value of waiting to refund. |
Similar financial terms
Stopping curve refunding rateA refunding rate that falls on the stopping curve.
Yield curve
The yield curve, which plots the term structure, shows the relationship between yield (interest rate) and maturity for a set of similar securities. Typically, different yield curves are drawn for zero-coupon bonds (zero-coupon yield curve) and for coupon bonds quoted at par (par yield curve).
Yield curve strategies
Positioning a portfolio to capitalize on expected changes in the shape of the Treasury yield curve.
Yield curve option-pricing models
Models that can incorporate different volatility assumptions along the yield curve, such as the Black-Derman-Toy model. Also called arbitrage-free option-pricing models.
Theoretical spot rate curve
A curve derived from theoretical considerations as applied to the yields of actually traded Treasury debt securities because there are no zero-coupon Treasury debt issues with a maturity greater than one year. Like the yield curve, this is a graphical depiction of the term structure of interest rates.
Steepening of the yield curve
A change in the yield curve where the spread between the yield on a long-term and short-term Treasury has increased.
Spot rate curve
The graphical depiction of the relationship between the spot rates and maturity.
Riding the yield curve
Buying long-term bonds in anticipation of capital gains as yields fall with the declining maturity of the bonds.
Parallel shift in the yield curve
A shift in the yield curve in which the change in the yield on all maturities is the same number of basis points. In other words, if the 3 month T-bill increases 100 basis points (one percent), then the 6 month, 1 year, 5 year, 10 year, 20 year, and 30 year rates increase by 100 basis points as well.
Non-parallel shift in the yield curve
A shift in the yield curve in which yields do not change by the same number of basis points for every maturity.
Death Valley Curve
In venture capital, refers to the period before a new company starts generating revenues, when it is difficult for the company to raise money.
Demand curve
The deman curve is a graphic illustration depicting the relationship between quantity demanded and price when all other economic variables are held constant.
