What Is a Deduction? A deduction is an expense that can be subtracted from a taxpayer’s gross income in order to reduce the amount of income that is subject to taxation. For example, if you earn $50,000 in a year and make a $1,000 donation to charity during that year, you are eligible to claim
What Is a Deed in Lieu of Foreclosure? A deed in lieu of foreclosure is a document that transfers the title of a property from the property owner to their lender in exchange for relief from the mortgage debt. Choosing a deed in lieu of foreclosure can be less damaging financially than going through a
What Is a Deed of Release? A deed of release is a legal document that removes a previous claim on an asset. It provides documentation of release from a binding agreement. A deed of release might be included when a lender transfers the title of real estate to the homeowner upon satisfaction of the mortgage.
What Is a Deed of Reconveyance? A deed of reconveyance is a document that transfers the title of a property from a mortgage lender to the borrower once the loan has been paid. Key Takeaways A deed of reconveyance is issued when a mortgage has been paid in full.The deed of reconveyance confirms that the
What Is a Deep-Discount Bond? A deep-discount bond is a bond that sells at a significantly lesser value than its par value. In particular, these bonds sell at a discount of 20% or more to par and has a yield that is significantly higher than the prevailing rates of fixed-income securities with a similar profiles.
What Is the Deep Web? The deep web refers to parts of the internet not fully accessible through standard search engines like Google, Yahoo!, and Bing. The deep web includes pages that were not indexed, fee-for-service (FFS) sites, private databases, intranets, and sites found on the dark web. Key Takeaways The deep web refers to
What Is a Default? Default is the failure to make required interest or principal repayments on a debt, whether that debt is a loan or a security. Individuals, businesses, and even countries can default on their debt obligations. Default risk is an important consideration for creditors. Key Takeaways A default occurs when a borrower stops
What Is a Default Model? A default model is constructed by financial institutions (FIs) to determine the likelihood of a default on credit obligations by a corporation or sovereign entity. These statistical models often use regression analysis with certain market variables that are pertinent to a company’s financial situation to identify the nature and scope of credit risk. Internally, a
What Is Default Premium? A default premium is an additional amount that a borrower must pay to compensate a lender for assuming default risk. All companies or borrowers indirectly pay a default premium, though the rate at which they must repay the obligation varies. How Default Premium Works Typically the only borrower in the United
What Is Default Probability? Default probability is the likelihood over a specified period, usually one year, that a borrower will not be able to make scheduled repayments. It can be applied to a variety of different risk management or credit analysis scenarios. Also called the probability of default (PD), it depends, not only on the
