What Are Commercial Mortgage-Backed Securities (CMBS)? Commercial mortgage-backed securities (CMBS) are fixed-income investment products that are backed by mortgages on commercial properties rather than residential real estate. CMBS can provide liquidity to real estate investors and commercial lenders alike. Because there are no rules for standardizing the structures of CMBS, their valuations can be difficult.
What Are CMBX Indices? CMBX Indices are a group of financial indexes that track the commercial mortgage-backed securities (CMBS) market. These indexes represent 25 tranches (French word meaning “slice”) of CMBS, each with a different credit rating. Because mortgage-backed securities are illiquid and non-standardized in the over-the-counter (OTC) market, they often lack the transparency and
What Is the Chicago Mercantile Exchange (CME)? The Chicago Mercantile Exchange (CME), colloquially known as the Chicago Merc, is an organized exchange for the trading of futures and options. The CME trades futures, and in most cases options, in the sectors of agriculture, energy, stock indices, foreign exchange, interest rates, metals, real estate, and even weather.
What Is the Capital Market Line (CML)? The capital market line (CML) represents portfolios that optimally combine risk and return. It is a theoretical concept that represents all the portfolios that optimally combine the risk-free rate of return and the market portfolio of risky assets. Under the capital asset pricing model (CAPM), all investors will
What Is a Collateralized Mortgage Obligation? A collateralized mortgage obligation (CMO) refers to a type of mortgage-backed security that contains a pool of mortgages bundled together and sold as an investment. Organized by maturity and level of risk, CMOs receive cash flows as borrowers repay the mortgages that act as collateral on these securities. In
What Is a Constant Maturity Swap (CMS)? A constant maturity swap (CMS) is a variation of the regular interest rate swap in which the floating portion of the swap is reset periodically against the rate of a fixed maturity instrument, such as a Treasury note, with a longer maturity than the length of the reset period.
What Is a Clearing Member Trade Agreement (CMTA)? A clearing member trade agreement (CMTA) is an arrangement by which an investor may enter derivatives trades with a limited number of different brokers but later consolidate these trades at the end of the trading day with only one broker for clearing. The CMTA is used exclusively
A co-applicant is an additional person considered in the underwriting and approval of a loan or other type of application. Applying for a loan with a co-applicant can help to improve the chances of loan approval and also provide for more favorable loan terms. A co-applicant may become a co-borrower once the application is approved
What Is the Coase Theorem? The Coase Theorem is a legal and economic theory developed by economist Ronald Coase regarding property rights, which states that where there are complete competitive markets with no transaction costs and an efficient set of inputs and outputs, an optimal decision will be selected. It basically asserts that bargaining between
What Is a Coaster? A coaster is an employee with low ambition and low productivity who does just enough to get by. This type of employee is said to “coast” through their duties by doing the minimum amount of work to keep their position. Key Takeaways A coaster is an employee with low ambition and low
