Remaining principal balance
Similar financial termsWeighted average remaining maturity
The average remaining term of the mortgages underlying a MBS.
The length of time remaining until a bond's maturity.
The amount that the issuer of a bond agrees to repay the bondholder at the maturity date. The principal is also referred to redemption value, maturity value, par value or face value.
Principal orders refers to hte activity by a broker or dealer who buys or sells for his or her own account and risk.
The par or face value of a debt instrument
Value additivity principal
Prevails when the value of a whole group of assets exactly equals the sum of the values of the individual assets that make up the group of assets. Stated differently, the principle that the net present value of a set of independent projects is just the sum of the net present values of the individual projects.
Principal only (PO)
A mortgage-backed security (MBS) in which the holder receives only principal cash flows on the underlying mortgage pool. The principal-only portion of a stripped MBS. For PO securities, all of the principal distribution due from the underlying collateral pool is paid to the registered holder of the stripped MBS based on the current face value of the underlying collateral pool.
A situation that can be modeled as one person, an agent, who acts on the behalf of another person, the principal.
Principal of diversification
Highly diversified portfolios will have negligible unsystematic risk. In other words, unsystematic risks disappear in portfolios, and only systematic risks survive.
Notional principal amount
In an interest rate swap, the predetermined dollar principal on which the exchanged interest payments are based.
Original principal balance
The total amount of principal owed on a mortgage before any payments are made.
A zero-balance account (ZBA) is a checking account in which zero balance is maintained by transfers of funds from a master account in an amount only large enough to cover the checks presented.
Target cash balance
Optimal amount of cash for a firm to hold, considering the trade-off between the opportunity costs of holding too much cash and the trading costs of holding too little cash.
Receivables balance fractions
The percentage of a month's sales that remain uncollected (and part of accounts receivable) at the end of succeeding months.
Financing that is not shown as a liability in a company's balance sheet.
Net cash balance
Beginning cash balance plus cash receipts minus cash disbursements.
Balance of trade
Net flow of goods (exports minus imports) between countries.
Balance of payments
A statistical compilation formulated by a sovereign nation of all economic transactions between residents of that nation and residents of all other nations during a stipulated period of time, usually a calendar year.
Also called the statement of financial condition, it is a summary of the assets, liabilities, and shareholders' equity.
Balance sheet identity
Total Assets = Total Liabilities + Total Shareholders' Equity
An investment company that invests in stocks and bonds. The same as a balanced mutual fund.
Balanced mutual fund
This is a fund that buys common stock, preferred stock and bonds. The same as a balanced fund.
In a balance of payments, the basic balance is the net balance of the combination of the current account and the capital account.
An excess balance that is left in a bank to provide indirect compensation for loans extended or services provided.