Blog Category: Financial Terms
Get definitions and guidance on all the terms you need to know within accountancy and finance.
What is Sovereign Risk?
Sovereign Risk is the risk that the country will default on its financial obligations.
Conditional Prepayment Rate
The CPR is the annual rate at which a mortgage pool balance is assumed to be prepaid during the life of the pool.
Counter Cyclical Buffer
Basel III recommends that banks have a capital buffer to protect against the cyclicality of bank earnings, called the...
Vasicek Model for Probability of Default Modelling
Vasicek Rate Model refers to a mathematical method of modeling the movement and evolution of interest rates.
Unexpected Loss
Unexpected loss refers to the amount that a company could lose in addition to its average (anticipated) loss possibil...
Basel Accord
The Basel Accord is a set of agreements on banking regulations concerning capital risk, market risk, and operational ...
Sample Covariance
The sample covariance estimator uses the sample data for the expectation operator.The sample correlation is generated...
What is Seasonality?
Seasonality in a time series is a pattern that tends to repeat from year to year. Seasonality is mostly linked with s...
Vasicek Model for Interest Rate Modelling
The Vasicek model assumes a mean-reverting process for short-term interest rates. It produces a specific term structu...
Exotic Options
As the word represents, Exotic options are the options that are used rarely and are customised. They are opposite of ...
Net Stable Funding Ratio
The net stable funding ratio is a liquidity requirement that requires banks to have sufficient stable funding to cove...
Convexity Formula
Convexity relates to the interaction between a bond's price and its yield as it experiences changes in interest rates.