Weighted average coupon
The weighted average of the gross interest rate of the mortgages underlying the pool as of the pool issue date, with the balance of each mortgage used as the weighting factor. |
Similar financial terms
Weighted average lifeFor amortizing securities, investors do not talk in terms of a bond’s maturity since its principal is made over time. This is because the stated maturity of such securities only identifies when the final principal payment will be made.
Weighted average portfolio yield
The weighted average of the yield of all the bonds in a portfolio.
Weighted average remaining maturity
The average remaining term of the mortgages underlying a MBS.
Weighted average maturity
The Weighted average maturity (WAM) of a MBS is the weighted average of the remaining terms to maturity of the mortgages underlying the collateral pool at the date of issue, using as the weighting factor the balance of each of the mortgages as of the issue date.
Weighted average cost of capital
The weighted average cost of capital (WACC) is the expected return on a portfolio of all the firm's securities when debt, equity and tax shields are taken into account. Used as a hurdle rate for capital investment.
Market value-weighted index
An index of a group of securities computed by calculating a weighted average of the returns on each security in the index, with the weights proportional to outstanding market value.
Average
The sum of n numbers divided by n.
Dow Jones Industrial Average
The Dow Jones Industrial Average (DJIA) is based on a portfolio consisting of 30 blue-chipi stocks in the United States. The weights given to the stocks are proportional to their prices.
Nikkei 225 Stock Average
The Nikkei 225 Stock Average (NIKKEI 225) is based on a portfolio of 225 of the largest stocks trading on the Tokyo Stock Exchange. Stocks are weighted according to their prices.
Moving average
The moving averages is one of the oldest and most popular of technical analysis tools. A simple moving average is calculated by adding together the closing price of a financial instrument over a certain number of days and then dividing the sum by the number of days involved. So, for example, the seven day average for a share price would be calculated by taking seven days worth of data, adding them together and dividing by seven.
To calculate the movingaverage:
1. Take the f ...
Simple moving average
The mean, calculated at any time over a past period of fixed length.
Batting average
Percentage of the time you are successful (from baseball).
"The U.S.' largest pension funds have accumulated major-league batting averages in selecting top-performing domestic equity and fixed-income money managers during the last 5 years."
Pensions & Investments , May 2, 1994, p.1.
Coupon rate
The interest rate that the issuer of a bond agrees to pay each year to the bondholder. The coupon rate multiplied by the principal of a bond provides the nominal amount of the coupon. For example, a bond with a 5.1% coupon rate and a principal of $1,000 provides an annual interest of $51. The coupon rate is also referred to as the nominal rate.
Coupon
The annual amount of the interest payment made to owners during the term of the bond.
Zero-coupon bonds
The holder of a zero-coupon bond realizes interest by buying the bond at a discount to its principal value. These bonds made their debut in the U.S. bond market in the early 1980s.
Deferred-coupon bonds
Bonds that let the issuer avoid using cash to make interest payments for a specified number of years. There are three types of deferred-coupon structures: (a) deferred-interest bonds, (b) step-up bonds and (c) payment-in-kind bonds.
Zero-coupon interest rate
The interest rate that would be earned on a bond that provides no coupons.
Zero-coupon convertible
A zero-coupon bond convertible into the common stock of the issuing company after the stock reaches a certain price, using a put option inherent in the security. It might as well refer to zero-coupon bonds, which are convertible into an interest bearing bond at a certain time before maturity.
Pass-through coupon rate
The interest rate paid on a securitized pool of assets, which is less than the rate paid on the underlying loans by an amount equal to the servicing and guaranteeing fees.
Low-coupon bond refunding
Refunding of a low coupon bond with a new, higher coupon bond.
Long coupons
(a) Bonds or notes with a long current maturity. (b) A bond on which one of the coupon periods, usually the first, is longer than the other periods or the standard period.
Level-coupon bond
Bond with a stream of coupon payments that are the same throughout the life of the bond.
Coupon equivalent yield
True interest cost expressed on the basis of a 365-day year.
Coupon payments
A bond's interest payments.
Current coupon
A bond selling at or close to par, that is, a bond with a coupon close to the yields currently offered on new bonds of a similar maturity and credit risk.
