Marketization: It must be determined by the market supply and demand relationship, which not only reflects the actual market supply and demand situation, but also reflects the market's expectations for future supply and demand situations.

Basic: in a basic position in the interest rate system and financial product price system

Transmission: The market signal reflected, or the regulatory signal sent by the central bank through the benchmark interest rate, can be effectively transmitted to other financial markets and financial product prices.

Viewpoint: The interest rate maturity structure depends entirely on the market's expectations of future interest rates, that is, the spot interest rate of long-term bonds is a function of the expected interest rate of short-term bonds

Assuming: There are certain expectations for future short-term interest rates, and the flow of funds between the long-term capital market and the short-term capital market is completely free.

Viewpoint: Each type of investors fixedly prefers specific parts of the yield curve, thus forming a segmented market with a term as the division mark. The interest rate level is determined by the supply and demand relationship of each term market.

Assumption: It is believed that bond markets with different maturities are not related to each other, so that the problem of simultaneous fluctuations in bond interest rates for different maturities cannot be explained.

Liquidity premium theory is a combination of expectations theory and market segmentation theory

Viewpoint: The spot interest rate of long-term bonds is the average of the short-term expected interest rate in the future plus a certain liquidity risk premium

The shorter the interest calculation period, the more times the compound interest is calculated in a year, the larger the annual interest amount will be.

Quotation rate: Annual interest rate, also known as nominal interest rate

Interest rate for interest: Interest rate for interest = quotation rate ¸ Number of compound interest times per year

Valid annual interest rate: Valid annual interest rate = (1 Quote rate ¸m) m-1

Refers only to the systemic risk of the portfolio, neither to the risk of a single asset nor to the full risk of the portfolio

A process for the contribution of assets to portfolio risk, i.e. beta coefficient

The probability of an event that is inevitable is 1, and the probability of an event that is impossible is 0. Generally, the probability of a random event is between 0 and 1. The greater the probability, the greater the possibility of the event.

Discrete distribution: Random variables take only finite values, and there is a definite probability corresponding to these values.

Continuous distribution: Random variables take infinite values ​​and all give corresponding probability

Expected value = å (Pi·Ki), Pi represents the probability of the occurrence of the i-th result, and Ki represents the return rate of the i-th result

Variance is a quantity used to represent the degree of dispersion between a random variable and a expected value. It is the average number from squared.

The standard deviation is the square root of the variance

The coefficient of variation is the ratio of standard deviation to the mean, and is suitable for situations where the expected value is the same or different. The greater the coefficient of variation, the greater the risk.

Influencing factors: investment proportion, standard deviation, correlation coefficient

The beta coefficient is an indicator to measure the systemic risk of an asset

The size of a stock's beta value depends on

β=1, the return rate of this asset is in the same direction and proportional change as the average return rate of the market

β<1, the fluctuation range of the return rate of the asset is less than the fluctuation range of the return rate of the market, and the systemic risk contained is less than the risk of the market combination

β>1, the fluctuation range of the return rate of the asset is greater than the fluctuation range of the return rate of the market, and the systemic risk contained is greater than the risk of the market combination

The relationship between necessary rewards and risks of individual assets or portfolios under market equilibrium conditions

When the expected rate of return > the necessary rate of return, investment should be made; when the expected rate of return = the necessary rate of return, you can choose to invest or not to invest in the project; when the expected rate of return < the necessary rate of return, investment should not be made.