Bootstrapping

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Bootstrapping

Creating a theoretical spot rate curve using one yield projection as the basis for the yield of the next maturity. Bootstrapping follows the work of Efron. It involves a Monte Carlo approach.

Bootstrap

1. To start a company with personal finances rather than through loans or venture capital. This is obviously a large risk to the entrepreneur as he/she has no recourse should the business fail. On the other hand, it allows the entrepreneur to maintain control of the business and has the potential to be very successful. It is famously said that Ross Perot established Electronic Data Systems with $1,000 in personal savings; he maintained complete control of the company until its IPO six years later. This is an example of bootstrapping. See also: Seed money.

2. To calculate the yield curve on a zero-coupon Treasury bill. Because the U.S. Treasury does not issue new T-bills constantly, bootstrapping is used to create a yield curve by filling in the missing yields on the T-bills.
References in periodicals archive ?
SST's Boot-Strap Loader demo kit for the FlashFlex51 family is available now for $99.
In Birmingham, it risks undoing all the great strides that have been made to pull up its image by the boot-straps.
The work hard, save well, pull yourself up by your boot-straps philosophy of the British people was sabotaged.
Dowie hauled Palace up by the boot-straps and into the top flight last season via the play-offs after taking over in December with the club in the bottom four of the Championship.
By her own admission,Fergie pulled herself up by her boot-straps and got on with it, fighting off her years of debt and flab to become a successful, respected and hard working businesswoman.
James was only too aware of the contrast, and was thrilled his side pulled themselves up by their boot-straps to claim what could prove a vital win.
He says that unless Welsh workers are dragged up by their boot-straps, Wales will continue to slip behind the best in Europe.
AS SOMEONE who picked up an ailing Newport by it's boot-straps and transformed it into one of the most successful rugby clubs in Europe, Tony Brown knows exactly how his Bridgend counterpart Leighton Samuel is feeling.