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Interest Rate Risk Formula

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Interest Rate Risk is a valuable financial measurement, particularly with fixed income investments, helping investors understand the fluctuations in fixed income securities. Check FAQs

IR risk = \frac{OP - NP}{NP}

IR_risk - Interest Rate Risk?OP - Original Price?NP - New Price?

Interest Rate Risk Example

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With units

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Here is how the Interest Rate Risk equation looks like with Values.

Here is how the Interest Rate Risk equation looks like with Units.

Here is how the Interest Rate Risk equation looks like.

2.9823 = \frac{450 - 113}{113}

2.9823 = \frac{450 - 113}{113}

2.9823 = \frac{450 - 113}{113}

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Interest Rate Risk Solution

Follow our step by step solution on how to calculate Interest Rate Risk?

FIRST Step Consider the formula

IR risk = \frac{OP - NP}{NP}

Next Step Substitute values of Variables

∴

IR risk = \frac{450 - 113}{113}

Next Step Prepare to Evaluate

∴

IR risk = \frac{450 - 113}{113}

Next Step Evaluate

∴

IR risk = 2.98230088495575

LAST Step Rounding Answer

∴

IR risk = 2.9823

Interest Rate Risk Formula Elements

Variables

Interest Rate Risk

Interest Rate Risk is a valuable financial measurement, particularly with fixed income investments, helping investors understand the fluctuations in fixed income securities.

Symbol: IR_risk

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Interest Rate Risk

Original Price

Original price is the total cost associated with the purchase of the product.

Symbol: OP

Measurement: NAUnit: Unitless

Note: Value can be positive or negative.

Formulas to find Original Price

New Price

The New Price refers to the anticipated or calculated price of a fixed-income security (such as a bond) after a change in interest rates.

Symbol: NP

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find New Price

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How to Evaluate Interest Rate Risk?

Interest Rate Risk evaluator uses Interest Rate Risk = (Original Price-New Price)/New Price to evaluate the Interest Rate Risk, Interest Rate Risk is a valuable financial measurement, particularly with fixed-income investments, helping investors understand the fluctuations in fixed income securities. Interest Rate Risk is denoted by IR_risk symbol.

How to evaluate Interest Rate Risk using this online evaluator? To use this online evaluator for Interest Rate Risk, enter Original Price (OP) & New Price (NP) and hit the calculate button.

FAQs on Interest Rate Risk

What is the formula to find Interest Rate Risk?

The formula of Interest Rate Risk is expressed as Interest Rate Risk = (Original Price-New Price)/New Price. Here is an example- 2.982301 = (450-113)/113.

How to calculate Interest Rate Risk?

With Original Price (OP) & New Price (NP) we can find Interest Rate Risk using the formula - Interest Rate Risk = (Original Price-New Price)/New Price.

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Interest Rate Risk Formula

Interest Rate Risk Example

Interest Rate Risk Solution

Interest Rate Risk Formula Elements

Other formulas in Risk Management category

How to Evaluate Interest Rate Risk?

FAQs on Interest Rate Risk

Variable Name