glossary

GLOSSARY

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Duration gap

Duration gap refers to the difference between the lifespan of a company's assets, and the lifespan of its liabilities. Analysis of duration gap is done to quantify the level of interest rate risk a company has. Duration gap is positive when assets have a longer duration than corresponding liabilities. This means that a company will benefit from falling interest rates, because the cost of liabilities will decrease faster than the value of the assets.

Dutch Tulip Bulb Market Bubble

The Dutch tulip bulb market bubble occurred in the early-1600s. Tulips became a status symbol among the upper classes of Holland; strong demand drove market speculation, which sent the prices of tulips bulbs to unsustainable levels. Bulbs were traded on stock exchanges, and novice investors were selling off personal assets to participate in tulip investment. In 1637, prices dropped, and tulip bulbs were sold off in a panic. Many investors lost everything as a result