negative interest rate
31Negative Watch — A status that the credit rating agencies (Standard and Poor s, Moody s and Fitch) give a company while they are deciding whether to lower that company s credit rating. Once a company has been placed on negative watch, it has a 50% chance of its… …
32Negative Arbitrage — The opportunity lost when municipal bond issuers assume proceeds from debt offerings and then invest that money for a period of time (ideally in a safe investment vehicle) until the money is used to fund a project, or to repay investors. The lost …
33Negative Convexity — When the shape of a bond s yield curve is concave. A bond’s convexity is the rate of change of its duration, and is measured as the second derivative of price with respect to yield. Most mortgage bonds are negatively convex. Callable bonds… …
34Negative gap — Refer instead to Constant rate in interest sensitivity analysis …
35Adjustable-rate mortgage — A variable rate mortgage, adjustable rate mortgage (ARM), or tracker mortgage is a mortgage loan with the interest rate on the note periodically adjusted based on an index which reflects the cost to the lender of borrowing on the credit… …
36Fixed rate mortgage — A fixed rate mortgage (FRM) is a mortgage loan where the interest rate on the note remains the same through the term of the loan, as opposed to loans where the interest rate may adjust or float. Other forms of mortgage loan include interest only… …
37Variable-rate mortgage — A variable rate mortgage or floating rate mortgage is a mortgage loan where the interest rate varies to reflect market conditions. The interest rate will normally vary with changes to the base rate of the central bank and reflects changing costs… …
38Internal rate of return — The internal rate of return (IRR) is a capital budgeting metric used by firms to decide whether they should make investments. It is an indicator of the efficiency or quality of an investment, as opposed to net present value (NPV), which indicates …
39Inverse floating rate note — An inverse floating rate note, or simply an inverse floater, is a type of bond or other type of debt instrument used in finance whose coupon rate has an inverse relationship to short term interest rates (or its reference rate). With an inverse… …
40Mortgage Par Rate — An interest rate used as the reference point for which a mortgage lender will neither pay a rebate (yield spread premium or negative points) or require discount points for a mortgage. Also, an interest rate used as a reference point for which a… …
