Quantitative Finance
What is Quantitative Finance? Quantitative finance is the use of mathematical models and extremely large datasets to analyze financial markets and securities. Common examples include (1) the pricing of derivative securities such as options, and (2) risk management, especially as it relates to portfolio management applications. Professionals who work in this field are often referred...
Commercial Paper
What is Commercial Paper? Commercial paper refers to a short-term, unsecured debt obligation that is issued by financial institutions and large corporations as an alternative to costlier methods of funding. It is a money market instrument that generally comes with a maturity of up to 270 days. Commercial paper is sold at a discount to...
Agency Bonds
What are Agency Bonds? Agency bonds, also known as agency debt, is the debt issued by a government-sponsored enterprise (GSE) or a federal agency. The key difference between a GSE and a federal agency is that a GSE’s obligations are not guaranteed by the government, whereas a federal agency’s debt is backed up by a...
Balanced Fund
What is a Balanced Fund? A balanced fund, also known as a hybrid fund, is characterized by diversification among two or more asset classes. A balanced fund usually combines stock and bond components in a diversified portfolio. Balanced funds typically follow a 60% stock and 40% bond asset allocation, as seen below: Asset allocation in...
Prime Rate
What is the Prime Rate? The term “prime rate” (also known as the prime lending rate or prime interest rate) refers to the interest rate that large commercial banks charge on loans and products held by their customers with the highest credit rating. Typically, the customers with high creditworthiness are large corporations that are borrowing...
