ROE measures net income as a proportion of shareholders’ equity. As with ROCE we look for businesses able to generate significant profits with limited equity investment.
Return on Equity
= Net income/Shareholders’ equity
When Interest Rates (IR) are high (i.e. borrowing is expensive) consumers pay more for their mortgages, loans and credit, so have less disposable income and spend less…inflation goes down.
You probably sort of know how index linked gilts, or “linkers,” work. The redemption value is linked to the change in the retail price index, or RPI, that takes place over the life of the gilt.
Another word for duration could be the average life of a bond. Most bonds pay annual or semi-annual coupons and have a redemption date. So whilst a bond maturing in three years and with a £5 annual…
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