Liquidity premium


 

Home
Site Map
Add Term
Search
About Us
Contributors

Liquidity premium

Forward rate minus expected future short-term interest rate.



Liquidity premium

Similar Matches

Liquidity crisis

Liquidity crisis

A financial crisis that occurs due to lack of liquidity. In international finance, it usually means that a government of central bank runs short of international reserves needed to peg its exchange rate and/or to service its foreign loans.


Liquidity preference hypothesis

Liquidity preference hypothesis

The argument that greater liquidity is valuable, all else equal. Also, the theory that the forward rate exceeds expected future interest rates.


Liquidity ratio

Liquidity ratio

See 'acid test'.


Liquidity

Liquidity

The capicity to turn assets into cash, or the amount of assets in a portfolio that have that capacity. Cash itself (i.e., money) is the most liquid asset.


Liquidity trap

Liquidity trap

A situation in which expansionary monetary policy fails to stimulate the economy. As used by Keynes (1936), this meant interest rates so low that expectations of their increase made people unwilling to hold bonds. Today it usually means a nominal interest rate so near zero that lowering it further is impossible or ineffective.


Further Suggestions

Liquidity Fund
liquidity
Liquidity diversification
Accounting liquidity


 
All rights Reserved. Do not copy without permission. T4 Innovations Ltd