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Financial Terms | |
Negative duration |
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Definition of Negative durationNegative durationA situation in which the price of the MBS moves in the same direction as interest rates.
Related Terms:Dollar durationThe product of modified duration and the initial price. DurationA common gauge of the price sensitivity of an asset or portfolio to a change in interest rates. DurationThe weighted average of the time until maturity of each of the DurationThe expected life of a fixed-income security considering its coupon DurationThe time it takes for a policy or annuity to reach maturity. Effective durationThe duration calculated using the approximate duration formula for a bond with an Macaulay durationThe weighted-average term to maturity of the cash flows from the bond, where the ![]() Macaulay durationA widely used measure of price sensitivity to yield Modified durationThe ratio of Macaulay duration to (1 + y), where y = the bond yield. Modified duration is Modified durationThe Macaulay duration discounted by the per-period Mortgage durationA modification of standard duration to account for the impact on duration of MBSs of Negative amortizationA loan repayment schedule in which the outstanding principal balance of the loan Negative carryRelated: net financing cost negative cash flowThe cash flow from the operating activities of a business Negative convexityA bond characteristic such that the price appreciation will be less than the price Negative covenantA bond covenant that limits or prohibits altogether certain actions unless the bondholders agree. Negative goodwillA term used to describe a situation in which a business combination Negative Loan CovenantsLoan covenants designed to limit a corporate borrower's behavior Negative pledge clauseA bond covenant that requires the borrower to grant lenders a lien equivalent to any Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |