Prepayment and Quoted rate: Difference between pages

Latest revision as of 17:23, 25 August 2019

A rate expressed on the basis which is conventional in the market in which the parties are dealing or proposing to deal.

For example, in relation to interest rates in wholesale markets:

Short-term quoted rates are almost always nominal annual rates, either on a 360-day or 365-day basis
Longer-term rates are usually effective annual rates
Exceptions include the quotation of semi-annual rates in relation to many types of bond

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-. ''Banking''.
+A rate expressed on the basis which is conventional in the market in which the parties are dealing or proposing to deal.
-The non-contractual early repayment by bank customers of, for example, fixed rate mortgages.
+For example, in relation to interest rates in wholesale markets:
-. ''Accounting''.
+*Short-term quoted rates are almost always nominal annual rates, either on a 360-day or 365-day basis
+*Longer-term rates are usually effective annual rates
-An amount paid in advance for a financial benefit, represented by an asset in the organisation's balance sheet.
+*Exceptions include the quotation of semi-annual rates in relation to many types of bond
-It is a prepaid expense.
 == See also ==
-* [[Accrual]]
+* [[Day count conventions]]
-* [[Average effective maturity]]
+* [[Effective annual rate]]
-* [[Bookkeeping]]
+* [[Longer term]]
-* [[Early Repayment Charge]]
+* [[Nominal annual rate]]
-* [[Extension risk]]
+* [[Semi-annual rate]]
-* [[Prepayment risk]]
+* [[Short term]]
-* [[Prepayments]]
-[[Category:Accounting,_tax_and_regulation]]
+[[Category:The_business_context]]
-[[Category:Identify_and_assess_risks]]
 [[Category:Manage_risks]]
-[[Category:Risk_frameworks]]
+[[Category:Financial_products_and_markets]]
+[[Category:Liquidity_management]]