Long-Term Interest Rate

Long-Term Interest Rate

An interest rate on a financial instrument with a maturity of longer than one year. A long-term interest rate is usually (but not always) higher than a short-term rate because of the added risk of committing capital to a person or project for such a long period of time.
References in periodicals archive ?
A very useful first step would be to construct and regularly report an official synthetic long-term interest rate - say the average 10-year yield on governments' bonds weighted by either the size of their economies or their total debt stock.
However, the average long-term interest rate in Cyprus in the year to August 2004 was 5.2% and Cyprus fulfils the criterion on the convergence of long-term interest rates.
[1984, 1985], Cebula [1988], and Hoelscher [1986], an open-economy loanable funds model is adopted in which the nominal long-term interest rate is determined by a loanable funds equilibrium of the form:
It is hypothesized that, in principle paralleling Barth, Iden, and Russek [3] and Cebula [4], the real demand for long-term bonds is an increasing function of the ex ante real long-term interest rate. Paralleling Hoelscher [9] and Cebula [4], the expected sign on [D.sub.EARSR] is negative because the higher the short-term ex ante real interest rate the greater the degree to which bond demanders/buyers substitute short-term bonds for long-term bonds.
Correlation of long-term interest rate changes(a) Average for period 1970-74 1975-79 1980-84 1985-89 1990-96 Vis-a-vis Japan 0.08 0.14 0.57 0.24 0.37 Germany 0.23 0.25 0.56 0.80 0.49 Canada 0.67 0.56 0.84 0.89 0.74 a) Long-term governments bonds.
Harmonised long-term interest rate statistics for the acceding countries joining the EU on May 1 were published for the first time on April 29 by the EU's statistical office Eurostat and the European Central Bank (ECB).
According to Mitchell Adelstein, CRG President, "The borrower clearly had the option of waiting until the loan matured, but we delivered a comprehensive strategy that eliminated long-term interest rate risk and created substantial savings due to rising short-term interest rates." The combination of the two strategies proved highly effective.
The Bank also made it clear, at least as importantly, that the long-term interest rate rise should be opposed.
Insignia locked in a very favorable long-term interest rate of 7.07 percent with Fannie Mae through Republic Bank as seller/servicer, down from the 8.43 percent the co-op had been paying, just two days before rates rose.
Although factors that might negatively impact long-term interest rate stability are not in the ascendancy at this time, borrowers should not take anything for granted, one expert advises.
But a trader at a foreign-affiliated brokerage firm said there is ''little room'' for further declines in the long-term interest rate, unless a fresh incentive triggers more buying, citing the growing caution among investors over precariously high prices.
The long-term interest rates set in bond markets have so much impact on business conditions that changes in investors' views can influence economic reality almost as much as vice versa.

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