Cap Financial Glossary
What is it? The maximum allowable increase, for either payment or interest rate, for a specified amount of time on an adjustable rate mortgage. See Adjustable Rate Mortgages for a complete guide.Finance Term Definition Added By: Lucy
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Financial Term Risk is The degree of uncertainty regarding the rate of return on and/or the principal value of an investment.Financial Term positioning is The act of holding a financial instrument, one or more portfolios of financial instruments, or ones entire balance sheet in a way that exposes the holder to profits or losses from future changes in market prices. Positions may be taken with the intent to profit from expected future market changes (trading activities); may result from inventories of financial assets maintained for sale to customers (dealing activities); or may be the result of the net exposure from transactions (residual positions resulting from trading activities, dealing activities, or customer accommodations). Banks take positions in one of two ways (1) In their trading accounts, banks (mainly large banks) may take positions with one or more financial instruments in the expectation of profiting from future rate changes. (2) More typically, banks hold or take balance sheet positions. The cumulative interest rate risk exposure from customer deposits, loans, and other activities creates a net residual position that the bank may or may not hedge. Choosing not to hedge is positioning. Alternatively, banks may create a position or add to a residual position in the expectation of profiting from them.
Financial Term Researchers is Within a Network of Excellence, researchers means research staff with at least four years of research experience or those in possession of a doctoral degree. Additionally, a researcher must either be an employee of one of the contractors or be working under its direct management authority in the framework of a formal agreement between the contractor and the researchers employer.
Financial Term puttable advance is A loan granted to a member financial institution by a Federal Home Loan Bank. The put feature in a puttable advance enables the borrower to prepay the advance, in whole or in part, in the event that prevailing rates decline. Borrowers benefit when using this type of borrowing to fund loans or investments that prepay when prevailing interest rates fall.
Financial Term ACH is Automated clearing house (also known as direct deposit)