Glossary of financial terms

100% FHA experience The probability that a loan will be retired during any given year under assumption that the conditional monthly probabilities within each year are constant.

100% PSA convention Assumes that 0.2% of the principal is paid in the first month and will increase by 0.2% in each of the following months, finally leveling out at 6% until maturity.

Accrued interest The coupon income that accrues from the last coupon date to the settlement date of the transaction.

Adjustable-rate mortgage (ARM) A mortgage in which the interest rates are linked to certain indexes of borrowing rates and change over the life of the contract.

Adjusted maturity date The maturity date of the bond, rounded down to the nearest quarter ...

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