Difference between revisions of "Instrument Internal Rate Of Return"

From Open Risk Manual
(Initial Entry)
 
 
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== Definition ==
 
== Definition ==
'''Instrument Internal Rate Of Return'''. The discount rate that results in a Net Present Value of zero for a series of future cash flows for the holder of the financial instrument.
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'''Instrument Internal Rate Of Return'''. The discount rate that results in a [[Net Present Value]] of zero for a series of future cash flows for the holder of the financial instrument.
  
  
 
== Issues and Challenges ==
 
== Issues and Challenges ==
Notes @SMER on 18 November ISS is the interest rate used to calculate the NPV from a given Face Value. Yield & Face => NPV NPV & Yield => IRR is the rate used to calculate that NPV. This makes specific reinvestment assumptions.
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* reinvestment assumptions
  
 
== Disclaimer ==
 
== Disclaimer ==

Latest revision as of 11:53, 17 September 2021

Definition

Instrument Internal Rate Of Return. The discount rate that results in a Net Present Value of zero for a series of future cash flows for the holder of the financial instrument.


Issues and Challenges

  • reinvestment assumptions

Disclaimer

This entry annotates a FIBO Ontology Class. FIBO is a trademark and the FIBO Ontology is copyright of the EDM Council, released under the MIT Open Source License. There is no guarantee that the content of this page will remain aligned with, or correctly interprets, the concepts covered by the FIBO ontology.