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rho

 
Dictionary: rho   () pronunciation
n.
The 17th letter of the Greek alphabet.

[Greek rhō, of Phoenician origin.]


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Variant: ρ

The symbol customarily used for the population correlation coefficient.



The rate at which the price of a derivative changes relative to a change in the risk-free rate of interest. Rho measures the sensitivity of an option or options portfolio to a change in interest rate.

Investopedia Says:
For example, if an option or options portfolio has a rho of 12.124, then for every percentage-point increase in interest rates, the value of the option increases 12.124%.

Related Links:
We examine various ways in which companies use derivatives to manage risk. Corporate Use Of Derivatives For Hedging
Understand the various factors that influence them so you can learn to anticipate their movements for profit. Trying To Predict Interest Rates
Learn how analyzing these variables are crucial to knowing when to exercise early. Dividends, Interest Rates and Their Effect on Stock Options


Wikipedia: Rho
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Rho may refer to:


  • Rho (letter), a letter of the Greek alphabet, upper case Ρ, lower case ρ

Symbols

in mathematics
in physics
in chemistry
in biology
in economics
  • Rho (finance), in Quantitative Finance, a first order derivative of an option pricing formula versus the rate of a risk-free investment.
in statistics

Places

  • Rho (Italy), a town near Milan, Italy (not to be confused with Ro, Italy)
  • Rho Island, a small Greek island near Kastellorizo
  • Rho River, a tributary of the Dora di Bardonecchia
  • Rhodes International Airport, "Diagoras", a Greek airport whose IATA code is RHO

Other

See also


 
 

 

Copyrights:

Dictionary. The American Heritage® Dictionary of the English Language, Fourth Edition Copyright © 2007, 2000 by Houghton Mifflin Company. Updated in 2009. Published by Houghton Mifflin Company. All rights reserved.  Read more
Statistics Dictionary. A Dictionary of Statistics. Second edition revised. Copyright © Oxford University Press, 2008. All rights reserved.  Read more
Investment Dictionary. Copyright ©2000, Investopedia.com - Owned and Operated by Investopedia Inc. All rights reserved.  Read more
Wikipedia. This article is licensed under the Creative Commons Attribution/Share-Alike License. It uses material from the Wikipedia article "Rho" Read more