on 25-Oct-2014 (Sat)

if a 1-year deposit pays 2.5% each 3 months, the interest is quoted as 10% (no compounding effect is taken into account)

An internal rate of return (IRR) is the one single interest rate which it is necessary to use when discounting aseries of future values to achieve a given net present value.

An internal rate of return is sometimes known as a money-weighted rate of return, because the rate so calculated varies according to the cashflows arising over the period.

the absolute rate of return, rarely quoted is NOT necessarily per annum but per period of investment

Internal Rate of Return calculated by by discounting all future cashflows and equating it to current price of an instrument is equivalent to the interest rate which it is necessary to use when discounting a series of future values and a cashflow now, to achieve a zero present value (simply substract NPV from both sides of the equation).

the time-weighted rate of return is a geometric average. It can be calculated by compounding the growth for periods between flows of new money; for example when you invest into a fund now and then year later, to collect all the money 2 years from now.

time-weighted rate or return might be preferred to money-weighted rate of return (aka internal rate of return) for comparing the management of two funds for example, because the addition of new money is outside the control of the fund manager.

The payment stream of an annuity can also last indefinitely, in which case the annuity is known as a perpetual.

Historically, the term "Euro" has been used to describe any instrument which is held outside the country whose currency is involved. The term does not imply "European".

sterling deposit made in New York is called Eurosterling

US dollar commercial paper issued outside the USA is called Euro-commercial paper while US dollar commercial paper issued inside the USA is called domestic commercial paper.

Face value = nominal amount = principal

When the principal is not trasnferred between parties, and only used for calculations, it is referred to as a "notional" principal.

The "bid" price or rate is the rate at which the dealer quoting the price is prepared to buy or borrow.

The "offer" (or "ask") rate is the rate or price at which the dealer is prepared to sell or lend.

with cash, the dealer's bid means that he or she is willing to receive the cash (i.e. borrow cash) at that interest rate.

with a negotiable security, dealer's bid means that he is willing to receive the security and pay cash (i.e. invest cash) at that rate or price.

the bid and offer are not always quoted in that order (bid first, then offer) - they might be quoted the other way round.

LIBOR for currencies other than GBP, including EURIBOR, which is specifically for EUR, refer to loans/deposits starting in 2 days time (aka "spot")

EONIA an average of the EUR overnight rate as traded throughout the day, weighted by the volume.

EURONIA is a rate similar to EONIA published in the London market

In some markets, the overnight index is published the morning after the day to which it relates

In Swiss francs, transactions similar to EONIA based are based on the tom/next rate rather than the overnight rate.

tom/next rate used in Swiss franc transactions that are analog to EONIA transactions is not an average, but a fixing at 11:00 am