Defined terms for the annuity market and lifetime income landscape.
Term premium is the additional yield lenders require to hold a longer-maturity bond rather than rolling a series of short-maturity bonds over the same period, compensating for the interest rate risk and uncertainty embedded in the longer commitment.
Term structure of interest rates is the pattern of yields observed across bonds of different maturities at a given point in time, typically summarized visually by the yield curve.
A time average is the average of an outcome's values experienced by a single agent over a long period of time, treated as a measure of what that one agent actually experiences as the system unfolds.
A time-average return is the geometric mean per-period return realized by an investment held continuously over many periods, equivalent to the time-average growth rate of the invested capital.
