Examlex
Why does a stream bottom erode more deeply when its water level rises in a flood?
Risk-free Interest Rate
The theoretical rate of return of an investment with zero risk of financial loss, often represented by the yield on government bonds.
Two-factor Model
A financial model that considers two sources of risk in its valuation or pricing, typically used in evaluating or predicting financial returns.
Market Risk
The risk of losses due to factors that affect an entire market or asset class, also known as systematic risk, which cannot be eliminated through diversification.
Interest Rate Risk
The potential for investment losses resulting from changes in interest rates.
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