The remaining yield on longer-term bonds is a risk premium that is commensurate with U.S. interest-rate volatility (Japanese risk premiums are lower, but they also have nearly zero interest-rate variability).
Mr Eichengreen, for instance, wants emerging economies to discourage short-term capital inflows to minimise exchange-rate volatility.
Its global role would increase as assets were shifted into euros, but global exchange-rate volatility would rise.
For many emerging economies, small financial markets mean that exchange-rate volatility will be a structural, not a temporary problem.
Linking the kiwi dollar to the Australian dollar would not eliminate the overall risk of exchange-rate volatility facing New Zealand firms.
ECONOMIST: Should Australia and New Zealand form a currency union?
He is not short of bold ideas, including a global financial tax, the regulation of commodity derivatives and measures to limit exchange-rate volatility.
Never short on ambition, Mr Sarkozy wants the G20 to become the forum for talks about global economic stability and governance, including exchange-rate volatility.
All things equal, for typical bonds the longer the maturity the higher the duration (or price volatility from interest rate movements), and the smaller the coupon the higher the interest rate risk.
The quite popular Black-Scholes calculator figures the value of warrants using current price, strike price, time until expiry, interest rate risk and share volatility as variables.
Morgan can do complex calculations that were prohibitively expensive and time-consuming, such as running a trade through scenarios for both interest rate fluctuation and market volatility, rather than looking at just one variable at a time.
Many legit money managers sold Bernie-like low-volatility constructs to investors, promising a rate of return at least twice T-Bills.
"You are not chasing very fast returns, " says Wood, "and with an increased rate of growth comes higher volatility, " but in a time when retirement ages may be getting older and pensions are decreasing, emerging markets are going to be increasingly important.
Traders suggest that the Fed's indication that it may be nearing the end of its cycle of interest-rate increases will probably make the volatility and trading volume jump even more.
Investing in international markets may involve additional risks, such as social and political instability, market illiquidity, exchange-rate fluctuations, a high level of volatility and limited regulation.
Price volatility is scary for income investors because in the past it was identified with inflation and interest rate moves.
The Greenspan fan club claims that the chairman's skilful policies have not only reduced economic volatility, but may also, at least temporarily, have increased America's potential growth rate.
He reckons that starting from current levels of volatility, eliminating the business cycle would increase average well-being by the equivalent of a fall in the unemployment rate of only 0.2 percentage points.
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