PREPAYMENT MODEL
The way banks calculate the speed a mortgage will be repaid. A common way is the constant repayment rate model.
Your Free Online Legal Dictionary • Featuring Black’s Law Dictionary, 2nd Ed.
The way banks calculate the speed a mortgage will be repaid. A common way is the constant repayment rate model.
A take over method where an investor presuades the board to vote against the director and create a new board in their favor. This takes a long time and can be prevented
An option where the buyer is paid the difference between the strike price and the lowest price. Refer to option on the maximum/minimum, lookback option, and call on the maximum.
A financial professional who generates new business for an institution. This person is very successful in their area of trade.
When a portfolio is sold exposure is reduced to protect both parties. The cash settlement is paid and the derivatives are rewritten at current market levels. The process is repeated at the
Funds set aside to cover costs. They are established as contraacounts on a balance sheet. They can be hidden or implied for a security.
When a forward/future is purchased at a price less than the spot price plus the cost of carry and the difference is loaned until maturity creating a profit. Refer to cashandcarry arbitrage.
The attempt to profit by merger, acquisition, hostile takeover, recapitalization, spinoff, or other transactions based on the advice of a risk arbitrageur who analyzes future opportunities.
The spreading of exposure by combining firms with similar risk factors by risk pooling. Similar to group captive this is a retention vehicle.
Expected future claims covered by reserves paid by an insurer.
Selling inventory to pay off an asset conversion loan that is secured or unsecured usually obtained for a product that is seasonally demanded. AKA asset conversion loan.
A regulation imposed by the securities and exchange commission that allows securities to be registered once every two years causing advance registration of securities. AKA rule 415 registration.
An option that allows the buyer to lock in the profit before the possible loss occurs. Refer to cliquet, ladder, fixed strike shout, and floating strike shout option.
The ability of a company to get returns to shareholders. This is done when a company cannot decide on new opportunities that will generate profits for shareholders. Refer to cutting the melon
A UK GILT STRIP security known as a Sterling Transfer Accruing Government Security.
Applying reductions equally to a depreciable assets value in relation to predictions of its anticipated maturity. Refer to accelerated depreciation.
Debt where securites are issued directly by a company not a trust. They mature in 10 to 30 years and must be approved by an insurance regulators.
When a hedge is discounted using present value because the value changes daily.
Mapping interest rates across time on a yield curve. Refer to expectation, liquidity preference, and market segmentation theory.
A spread that takes advantage of volatility or percieved price in the forward market. This happens when options are traded with the same strike price but different maturity dates. AKA calendar spread