Perpetuity factor and Prepayment risk: Difference between pages
From ACT Wiki
(Difference between pages)
imported>Doug Williamson (Add link.) |
imported>Doug Williamson (Add link.) |
||
| Line 1: | Line 1: | ||
Prepayment risk is a form of interest rate risk for a financial institution. | |||
It arises from the non-contractual early repayment by customers of, for example, fixed rate mortgages. | |||
The financial institution therefore has an interest rate exposure for the - as yet unknown - prepayments by customers of its fixed interest rate product. | |||
== See also == | == See also == | ||
* [[ | * [[Interest rate risk]] | ||
* [[ | * [[Pipeline risk]] | ||
* [[ | * [[RMBS]] | ||
[[Category: | [[Category:Manage_risks]] | ||
Revision as of 14:02, 13 August 2016
Prepayment risk is a form of interest rate risk for a financial institution.
It arises from the non-contractual early repayment by customers of, for example, fixed rate mortgages.
The financial institution therefore has an interest rate exposure for the - as yet unknown - prepayments by customers of its fixed interest rate product.
