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| (EAR).
| | Schuldscheindarlehen. |
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| 1.
| | German loan instruments, more commonly known as Schuldscheine. |
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| A quoting convention under which interest at the quoted rate is calculated and added to the principal annually.
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| EAR is the usual quotation basis for instruments with maturities of greater than one year.
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| 2.
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| A conventional measure which expresses the returns on different instruments on a comparable basis.
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| The EAR basis of comparison is the equivalent rate of interest paid and compounded annually, which would give the same all-in rate of return as the instrument under review.
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| '''Example'''
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| GBP overnight interest is conventionally quoted on a simple interest basis for a 365 day year.
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| So GBP overnight interest quoted at 5.11% means:
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| (i)
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| Interest of 5.11% / 365
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| = 0.014% is paid per day.
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| (ii)
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| The ''equivalent'' effective annual rate is
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| = 1.00014<sup>365</sup> - 1
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| = 5.24%.
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| == See also == | | == See also == |
| * [[Annual effective rate]] | | * [[Schuldschein]] |
| * [[Annual effective yield]]
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| * [[Annual percentage rate]]
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| * [[Capital market]]
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| * [[Continuously compounded rate of return]]
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| * [[Effective annual yield]]
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| * [[Equivalent Annual Rate]]
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| * [[LIBOR]]
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| * [[Nominal annual rate]]
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| * [[Periodic rate of interest]]
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| * [[Real]]
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| * [[Return]]
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Revision as of 15:11, 11 May 2016
Schuldscheindarlehen.
German loan instruments, more commonly known as Schuldscheine.
See also
