Questions tagged [interest]
The interest tag has no usage guidance.
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Interest rate implied probability of default
Is there an equation or rule of thumb to determine the probility of default for a loan with a specific interest rate?
Let's say, a bank offers a company a loan with an interest rate of 6%, by which ...
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OIS, Fed Funds Rate and Working
I'm a bit confused about OIS. Is OIS the overnight interest rate or is it a swap. If OIS is the rate at which banks lend overnight, where does the swap come in? Don't they borrow at a fixed rate?
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How is the spread between the US-10 T-bond and the Fed funds rate determined?
In 2015 the Fed funds rate was 0.24%, while the US Treaury 10-year government bond was 2.24%.
How is the spread determined? Is there a formula to determine the spread of the US-10 T-bond and the Fed ...
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Variable Loan Interest Question
I have been attempting this question a few times over the past few days but can't seem to make any headway on it. Any help would be greatly appreciated.
A loan of €L was to be repaid over a twenty-...
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Properties of difference between continuous and discrete compounding of interest rate [closed]
The relationship between annual discrete and continuous compounding interest rates is given as:
$$1+r_d = e^{r_c}$$
My question is what are the properties of the difference between $r_d$ and $r_c$?
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