Macaulay Duration
Macaulay duration, also known as a term to maturity or average life, is the weighted average maturity of cash flows, in which the time of…
Finance
Modified Duration
Modified duration is a useful measure of a bond’s price (the present value of its cash flows) sensitivity to interest rate changes. It is an…
Effective Duration
Effective Duration assesses the price sensitivity of hybrid security (bond and option) to a change in the benchmark yield curve by measuring the duration of…
Negative Convexity
Negative convexity occurs when the yield curve of a bond is concave rather than convex; this is seen in mortgage-backed bonds and callable corporate bonds.…
Key Rate Duration
The sensitivity of a bond or bond portfolio to a 100-basis point 1% change in yield at a given maturity point is measured by key…
Key Rate
The key rate is a particular interest rate that is used to set bank lending rates and borrowers’ credit costs. The Bank of Canada sets…
Excess Returns
The phrase “excess returns” refers to a fund’s performance in comparison to a benchmark. For analysis, it will be dependent on a specific investment return…
Beta Coefficient
The beta coefficient, often known as the beta (β) or market beta, is a measure of a security’s or portfolio’s volatility or systematic risk in…
Negative Correlation
Negative correlation is a link between two items or variables in which one of them declines while the other increases. To put it another way,…
Independent Variable (IV)
An input, assumption, or driver that is modified in order to analyze its influence on a dependent variable (the outcome) is known as an independent…
Deviation Risk Measure
The deviation risk measure is a function that is used to assess financial risk and is distinct from other risk assessments. Risk measurement is largely…
Passive Investing
Passive investing (also known as passive management) is an investment technique that aims to optimize returns by reducing the amount of money spent on purchasing…
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