Interest is not a derivative of a debt instrument such as an obligation. The mos... | Hacker News

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AlDante2 on July 28, 2022 | parent | context | favorite | on: Ask HN: Higher order derivatives in everyday life?

Interest is not a derivative of a debt instrument such as an obligation.

The most common example quoted is slowing the rise of the rate of increase in inflation. Inflation is change in price, i.e. first derivative.

soonerroadie on July 28, 2022 [–]

Similarly, finance people don’t consider interest rates/yields to be derivatives. So, on a bond “duration” is the first derivative of price with respect to yield, and “convexity” is the second derivative.

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