What Is an International ETF? An international exchange-traded fund (ETF) is any ETF that invests specifically in foreign-based securities. The focus may be global, regional, or on a specific country and may hold equities or fixed-income securities. Key Takeaways International ETF is an exchange traded fund that specializes in foreign securities.An international ETF may track
What Is the International Federation Of Accountants (IFAC)? The International Federation of Accountants (IFAC) is a global organization representing the accounting profession. IFAC establishes and promotes international standards, and speaks for the profession on public policy issues. According to the IFAC website, the group serves the public interest through advocacy, development, and support for our
What Is the Interest Deduction? Interest deduction causes a reduction in taxable income. If a taxpayer or business pays interest, in certain cases the interest may be deducted from income subject to tax. Some examples of interest payments that can be deducted are: Interest payments for a mortgage on a rental property can also be
What Is an Interest Expense? An interest expense is the cost incurred by an entity for borrowed funds. Interest expense is a non-operating expense shown on the income statement. It represents interest payable on any borrowings—bonds, loans, convertible debt or lines of credit. It is essentially calculated as the interest rate times the outstanding principal amount
What Is Interest-On-Interest? Interest-on-interest, also referred to as ‘compound interest’, is the interest that is earned when interest payments are reinvested. Interest-on-interest is primarily used in the context of bonds, whose coupon payments are assumed to be re-invested and held until the bond is sold or matures. Key Takeaways Interest-on-interest, also referred to as ‘compound
What Is an Interest-Only ARM? An interest-only adjustable-rate mortgage (ARM) is a type of mortgage loan in which the borrower is only required to pay the interest portion owed each month for a certain period of time. During the interest-only period, only interest accrued each period must be paid, and a borrower is not required
What Is an Interest-Only Mortgage? An interest-only mortgage is a type of mortgage in which the mortgagor (the borrower) is required to pay only the interest on the loan for a certain period. The principal is repaid either in a lump sum at a specified date, or in subsequent payments. Key Takeaways An interest-only mortgage
What Is an Interest Rate? The interest rate is the amount a lender charges a borrower and is a percentage of the principal—the amount loaned. The interest rate on a loan is typically noted on an annual basis known as the annual percentage rate (APR). An interest rate can also apply to the amount earned
What Is an Interest Rate Ceiling? An interest rate ceiling is the maximum interest rate permitted in a particular transaction. It is the opposite of an interest rate floor. Financial lending instruments may include an interest rate ceiling as part of their contract provisions. They are commonly used in adjustable-rate mortgage agreements (ARMs). KEY TAKEAWAYS
What Is an Interest Rate Collar? An interest rate collar is a relatively low-cost interest rate risk management strategy that uses derivatives to hedge an investor’s exposure to interest rate fluctuations. Key Takeaways An interest rate collar uses options contracts to hedge interest rate risk to protect variable rate borrowers against rising rates or lenders
