What is Negative Amortization Limit? The negative amortization limit is a provision in certain bonds or other loan contracts that limits the amount of unpaid interest charges that can be added to the loan’s principal balance. Key Takeaways Negative amortization limit is a provision that limits the amount of unpaid interest charges that can be
What Is Negative Arbitrage? Negative arbitrage is the opportunity lost when bond issuers assume proceeds from debt offerings and then hold that money in escrow for a period of time (usually in cash or short-term treasury investments) until the money is able to be put to use to fund a project, or to repay investors.
What Is Negative Assurance? Negative assurance is a determination by an auditor that a particular set of facts is believed to be accurate since no contrary evidence has been found to dispute them. Negative assurance is normally used by auditors in situations where it is not possible to positively confirm the accuracy of financial reports.
What Is a Negative Bond Yield? A negative bond yield is when an investor receives less money at the bond’s maturity than the original purchase price for the bond. A negative bond yield is an unusual situation in which issuers of debt are paid to borrow. In other words, the depositors, or buyers of bonds
What Is a Negative Butterfly? A negative butterfly is a non-parallel shift in the yield curve where long and short-term yields fall more or rise less than intermediate rates. A negative butterfly shift effectively humps the plot of the yield curve. The opposite of a negative butterfly, where long and short-term yields rise more or
What Is a Negative Carry Pair? A negative carry pair is the foundation of the negative carry trade. A negative carry pair is a foreign exchange (forex) trading strategy in which the trader borrows money in a high-interest currency and invests it in a low-interest currency. A trader would only initiate this strategy if they
What Is a Negative Confirmation? Negative confirmation is a letter or document requesting that the recipient should only respond to the sender if there were an issue with the contents of the message or the recipient wanted to opt-out of the event that the letter had addressed. Negative confirmation letters can be used in many
What Is Negative Correlation? Negative correlation is a relationship between two variables in which one variable increases as the other decreases, and vice versa. In statistics, a perfect negative correlation is represented by the value -1.0, while a 0 indicates no correlation, and +1.0 indicates a perfect positive correlation. A perfect negative correlation means the
What Is Negative Equity? Negative equity occurs when the value of real estate property falls below the outstanding balance on the mortgage used to purchase that property. Negative equity is calculated simply by taking the current market value of the property and subtracting the amount remaining on the mortgage. key takeaways Negative equity occurs when
What Is the National Market System Plan (NMSP)? The national market system plan is a set of rules used primarily to select unique stock symbols for securities trading on U.S. exchanges. The plan also covers other aspects of equity securities trading activity, disclosure, and execution. The Securities and Exchange Commission (SEC) established the national market system
