What is yield curve type in SAP IS-B - SAP for Banking?

SAP Term: yield curve type

• Component: IS-B

• Component Name: SAP for Banking

• Description: Bank Components Framework in which the grid points are reference interest rates. The yield curve type is defined by the assignment of the following attributes: Yield category, quotation type, time dependency intraday, read procedure and interpolation category. It contains a yield curve structure for each assigned currency.

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• Key Concepts: 
  Yield curve type is a component of the IS-B SAP for Banking system. It is used to define the shape of a yield curve, which is a graphical representation of the relationship between interest rates and maturity dates. The yield curve type defines the shape of the curve, such as linear, exponential, or polynomial. 
  
  How to use it: 
  The yield curve type is used to define the shape of a yield curve. This can be done by selecting one of the predefined types in the system, or by creating a custom type. Once the type is selected, the system will generate a yield curve based on the parameters defined in the type. 
  
  Tips & Tricks: 
  When creating a custom yield curve type, it is important to consider how the parameters will affect the shape of the curve. For example, if you want a linear curve, you should set all parameters to 0. If you want an exponential curve, you should set some parameters to positive values and some to negative values. 
  
  Related Information: 
  The IS-B SAP for Banking system also includes other components related to yield curves, such as yield curves and yield curves points. These components are used to define specific points on a yield curve and can be used in conjunction with yield curve types to create more complex curves.