Interest Rate Risk Calculator

✖Original price is the total cost associated with the purchase of the product.ⓘ Original Price [OP]			+10% -10%
✖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.ⓘ New Price [NP]			+10% -10%

✖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 [IR_risk]

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Formula

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Interest Rate Risk

Formula

`"IR"_{"risk"} = ("OP"-"NP")/"NP"`

Example

`"2.982301"=("450"-"113")/"113"`

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Interest Rate Risk Solution

STEP 0: Pre-Calculation Summary

Formula Used

Interest Rate Risk = (Original Price-New Price)/New Price
IR_risk = (OP-NP)/NP
This formula uses 3 Variables

Variables Used

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

STEP 1: Convert Input(s) to Base Unit

Original Price: 450 --> No Conversion Required
New Price: 113 --> No Conversion Required

STEP 2: Evaluate Formula

Substituting Input Values in Formula

IR_risk = (OP-NP)/NP --> (450-113)/113

Evaluating ... ...

IR_risk = 2.98230088495575

STEP 3: Convert Result to Output's Unit

2.98230088495575 --> No Conversion Required

FINAL ANSWER

2.98230088495575 ≈ 2.982301 <-- Interest Rate Risk

(Calculation completed in 00.020 seconds)

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Credits

Created by Kashish Arora

Satyawati College (DU), New Delhi

Kashish Arora has created this Calculator and 50+ more calculators!

Verified by Vishnu K

BMS College of Engineering (BMSCE), Bangalore

Vishnu K has verified this Calculator and 200+ more calculators!

< 20 Risk Management Calculators

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Go Risk Adjusted Return on Capital = (Revenue-Expenses-Expected Loss+Income From Capital)/Capital Cost

Sortino Ratio

Go Sortino Ratio = (Expected Portfolio Return-Risk Free Rate)/Standard Deviation of Downside

Maximum Drawdown

Go Maximum Drawdown = ((Trough Value-Peak Value)/Peak Value)*100

Modigliani-Modigliani Measure

Go Modigliani-Modigliani measure = Return on Adjusted Portfolio-Return on Market Portfolio

Interest Rate Risk

Go Interest Rate Risk = (Original Price-New Price)/New Price

Sterling Ratio

Go Sterling Ratio = (Compound Annual Growth Rate/(Average Maximum Drawdown-10))*-1

Risk Tolerance

Go Risk Tolerance = (Public Equity Exposure*0.35)/Monthly Gross Income

Market Risk Premium

Go Market Risk Premium = Expected Equity Market Rate-Risk Free Rate

Basis Risk

Go Basis Risk = Future Price of Contract-Spot Price of Hedged Asset

Credit Value at Risk

Go Credit Value at Risk = Worst Credit Loss-Expected Credit Loss

Economic Capital

Go Economic Capital = Earnings at Risk/Required Rate of Return

Calmar Ratio

Go Calmar Ratio = (Average Rate of Return/Maximum Drawdown)*-1

Upside/Downside Ratio

Go Upside/Downside Ratio = Advancing Issues/Declining Issues

Credit Spread

Go Credit Spread = Corporate Bond Yield-Treasury Bond Yield

Probability of Default Regression Model

Go Probability of Default = 1/(1+exp(-Linear Combination))

Default Risk Premium

Go Default Risk Premium = Interest Rate-Risk Free Rate

Pain Ratio

Go Pain Ratio = Effective Return/Pain Index

Risk Exposure

Go Risk Exposure = Risk Impact*Probability

Risk Determination

Go Risk = Risk Impact*Likelihood

Loss Given Default

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Interest Rate Risk Formula

Interest Rate Risk = (Original Price-New Price)/New Price
IR_risk = (OP-NP)/NP

What is 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. The risk pertains to the exposure an investor has if the bond needs to be liquidated prior to maturity. Bonds will go up in value when the interest rates go down and fall in value when rates go up. Calculating the risk helps investors properly allocate investment dollars that meet investment objectives.

How to Calculate Interest Rate Risk?

Interest Rate Risk calculator uses Interest Rate Risk = (Original Price-New Price)/New Price to calculate 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 calculate Interest Rate Risk using this online calculator? To use this online calculator for Interest Rate Risk, enter Original Price (OP) & New Price (NP) and hit the calculate button. Here is how the Interest Rate Risk calculation can be explained with given input values -> 2.982301 = (450-113)/113.

FAQ

What is 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 and is represented as IR_risk = (OP-NP)/NP or Interest Rate Risk = (Original Price-New Price)/New Price. Original price is the total cost associated with the purchase of the product & 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.

How to calculate 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 is calculated using Interest Rate Risk = (Original Price-New Price)/New Price. To calculate Interest Rate Risk, you need Original Price (OP) & New Price (NP). With our tool, you need to enter the respective value for Original Price & New Price and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.

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