- Industry: Financial services
- Number of terms: 73910
- Number of blossaries: 1
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A class of a Collateralized Mortgage Obligation (CMO) whose principal is paid off first when the underlying mortgages are prepaid due to falling interest rates. When interest rates rise, there will be lower prepayments of the principal; companion bonds therefore absorb most of the prepayment risk of a CMO.
Industry:Financial services
Applies to derivative products. Hedging with a futures contract that is different from the underlying being hedged. Use of a hedging instrument different from the security being hedged. Hedging instruments are usually selected to have the highest price correlation to the underlying.
Industry:Financial services
An embedded option granting a bond issuer the right to buy back all or part of an issue prior to maturity.
Industry:Financial services
A proprietorship, partnership, corporation, or other form of enterprise that engages in business.
Industry:Financial services
The holding by one corporation of shares in another firm. One needs to allow for cross-holdings when aggregating capitalizations of firms. Ignoring cross-holdings leads to double-counting.
Industry:Financial services
The combination of cash flow uncertainty and reinvestment risk introduced by a call provision.
Industry:Financial services
An executive, usually appointed from outside, brought in to turn a company around and make it profitable.
Industry:Financial services
The exchange rate between two currencies expressed as the ratio of two foreign exchange rates that are both expressed in terms of a third currency. Foreign exchange rate between two currencies other than the US dollar, the currency in which most exchanges are usually quoted.
Industry:Financial services
A swaption in which the buyer has the right to enter into a swap as a fixed-rate payer. The writer therefore becomes the fixed-rate receiver/floating-ratepayer.
Industry:Financial services
