Quantitative techniques and Quarterly rate: Difference between pages

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Analysis with numbers and calculations.
The quarterly rate of interest (or yield) is a quoting convention for the simple interest ''nominal annual rate'' for compounding once per quarter (four times per year).
 
Coupon rates on instruments paying interest four times per year are often expressed as quarterly rates.
 
This makes rates broadly comparable, while also enabling the amounts of fixed interest payments and receipts to be determined easily.
 
 
 
'''Example'''
 
If the quoted quarterly rate is 6.00%,
 
the amount of interest compounded quarterly is:
 
= 6.00% / 4
 
= 1.50%.
 
 
Not to be confused with the related ''annual effective'' rate, which in this case is:
 
= 1.015<sup>4</sup> - 1
 
= 6.14%.




== See also ==
== See also ==
* [[Financial analysis]]
* [[Annual effective rate]]
* [[Qualitative techniques]]
* [[Nominal annual rate]]
* [[Quantitative easing]]
* [[Periodic rate of interest]]
* [[Quantitative fallacy]]
* [[Semi-annual rate]]
* [[Quantitative finance]]
* [[Sensitivity analysis]]


[[Category:The_business_context]]
[[Category:Identify_and_assess_risks]]
[[Category:Manage_risks]]
[[Category:Manage_risks]]
[[Category:Risk_frameworks]]
[[Category:Risk_reporting]]

Revision as of 20:55, 12 January 2016

The quarterly rate of interest (or yield) is a quoting convention for the simple interest nominal annual rate for compounding once per quarter (four times per year).

Coupon rates on instruments paying interest four times per year are often expressed as quarterly rates.

This makes rates broadly comparable, while also enabling the amounts of fixed interest payments and receipts to be determined easily.


Example

If the quoted quarterly rate is 6.00%,

the amount of interest compounded quarterly is:

= 6.00% / 4

= 1.50%.


Not to be confused with the related annual effective rate, which in this case is:

= 1.0154 - 1

= 6.14%.


See also