Debt Financial Glossary
What is it? A liability or obligation in the form of bonds, loans, mortgages or overdrafts owed to another person or persons and required to be paid by a specified date (maturity).Finance Term Definition Added By: Wyatt
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Other Similar Finance Terms:
Financial Term Liquidity is The flexibility of being able to obtain the cash value of investments without incurring significant loss.Financial Term Beta is This is a measure of market risk. It determines how volatile a share price is (ie how much a share tends to rise and fall over a period). The beta measures the distance between the high points and the low points, so the higher a shares beta, the more volatile it is. If youre investing for the long term, volatility doesnt matter much. However, if youre a short-term speculator, a highly volatile share can offer big rewards but also big potential losses if your timing is off.
Financial Term Commission is An amount paid by a financial institution to an intermediary for the placing of business.
Financial Term CGT is Capital Gains Tax - a tax on the increase in the value of an asset, such as a share, since you bought it.
Financial Term PSA model is One of two standard models for describing the rate at which prepayments have been, are, or are expected to be received for mortgages and mortgage-backed securities. The model assumes that borrowers are far less likely to refinance a new mortgage than they are to refinance an older mortgage. Thus the PSA model builds in an assumption of a 30-month phasein or ramp-up of prepayments. After a mortgage or a pool of mortgages is 30 months old, a speed of 100 percent PSA is equal to 6 percent CPR. Similarly, a speed of 200 percent PSA is equal to 12 percent CPR and 50 percent PSA is equal to 3 percent CPR. During the initial 30-month ramp-up, the PSA model assumes much slower speeds. For the first month, 100 percent PSA equals 0.20 percent CPR. In the second month, 100 percent PSA equals 0.40 percent CPR. This level rate of increase continues throughout the 30-month period. PSA is the standard prepayment model of the Bond Market Association, formerly the Public Securities Association. The letters PSA were once an acronym for the former organization name but now stand for prepayment speed assumptions.