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 ?
It'll be all hands to the decks, after all, to drag us up by our boot straps.
"And, from our perspective, where they are failing, or not performing as well as they could do, there is no real mechanism to pull them up by their boot straps."
The Kiwi has dragged a bunch of no-hopers up by their boot straps to play with pride, passion and no little skill, emerging as a genuine challenge to everyone.
Now we are exporting our expertise in pulling ourselves up by the boot straps.''
If we dragged ourselves up by our boot straps, and went all out for independence rather than watered-down devolution, we could afford, from our own resources, to electrify the Cardiff Valleys network.
Perhaps a Sir John Harvey Jonestype character could be found to pull Royal Mail up by the boot straps.
These people who moaned about Manchester getting everything are now moaning aswe are pulling ourselves up by our boot straps and turning our fortunes around.
We no longer need to paint ourselves as a region hauling itself up by the boot straps.
Moffett has dragged Welsh rugby up by its boot straps over the past three, dynamic years.