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The Yield Curve

Chapter
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Part of the Springer Finance book series (FINANCE)

Abstract

The uncertainty attached to the future movements of interest rates is an important part of the theory of financial decision making. Most agents are risk-averse, and risk is linked in particular to interest rates. Investment decisions and asset/liability management are often very sensitive to perturbations of the yield curve. To hedge interest rate risk, the markets use increasingly complicated financial products (forward contracts, futures contracts, options on contracts). These constitute the forward markets.

Keywords

Risk Premium Yield Curve Price Process Forward Rate Future Contract 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Copyright information

© Springer-Verlag Berlin Heidelberg 2007

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