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Home > QFINANCE Dictionary > Definition of variable rate

Definition of

variable rate

Finance

interest rate that fluctuates a rate of interest on a loan that is not fixed, but can change with the current bank interest rates.

Related definitions of "variable rate"

Recommended Further Reading (Term count)
  • Swap Valuation
    In finance, a swap is a derivative in which two parties agree to exchange one stream of cash flow against another. The swap buyer makes a stream of interest payments on a principal sum to the seller, based on the present value of the asset, for a fixed period of time. The seller then receives payments from the seller, which are usually based on a fixed rate, such as LIBOR. The swap valuation is the price that each party assigns to the components...
  • Hedging Interest Rate Risk—Case Study and Strategies
    This checklist examines how hedging can reduce a company’s exposure to interest rate fluctuations.
  • A Total Balance Sheet Approach to Financial Risk
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    We are living in some of the most volatile times in the history of the global financial markets. One of the reasons is exactly because they have become truly global. As banks seek to restore profitability, they may increase their offering of “treasury products” to customers. This article argues that these should be considered only in the context of a total balance sheet approach rather than transaction by transaction.
  • Managing Interest Rate Risk
    by Will Spinney
    Almost all firms are exposed to interest rate risk, but it can manifest itself in different ways. A proper response to this risk can only come following a full understanding of the context of the firm and its strategy, along with a full evaluation of the risk. Firms should generate a well thought out key performance indicator (KPI) and then apply one or more of the many tools available in the market to transfer interest rate risk.

Definitions of ’variable rate’ and meaning of ’variable rate’ are from the book publication, QFINANCE – The Ultimate Resource, © 2009 Bloomsbury Information Ltd. Find definitions for ’variable rate’ and other financial terms with our online QFINANCE Financial Dictionary.

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