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Finance Dictionary and Glossary of Investment Terms
Benchmark interest rate
Definition 1.
Also called the base interest rate, it is the minimum interest rate investors will demand for investing in a non-Treasury security. It is also tied to the yield to maturity offered on the comparable-maturity Treasury security that was most recently issued (on-the-run).
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Definition 2.
The minimum interest rate investors will accept for investing in a non-Treasury security. In general, this is the yield that is being earned on the most recent on-the-run Treasury security of similar maturityplus a premium. slso called base interest rate.
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