Fixed Versus Variable Rate Loans
讨论固定与浮动利率贷款合同的性质，推导最优贷款数量条件，并分析银行的最优组合边界和风险收益权衡。
ABSTRACT This paper discusses the nature of fixed and variable loan contracts and derives the conditions which determine the optimal quantity of each. The results indicate that the payoff functions are quite different and dependent upon the project financed. The appropriate conditions for the allocation of loan terms to a set of borrowers are then developed. Finally, the analysis derives the optimal portfolio frontier and risk‐return trade‐off for the banking firm. Here, it is demonstrated that the solution is unlikely to be at a point of zero interest rate risk.