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. |
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 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.
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.
Term to maturity
The term to maturity of a bond, commonly referred to as maturity or term, is the number of years over which the issuer has promised to meet the conditions of the obligation set out in the bond indenture. The maturity of a bond refers to the date that the debt will cease to exist, at which time the issuer will redeem the bond by paying the principal (or face value).
Yield to maturity
The total yield on a bond obtained by equating the bond's current market value to the discounted cash flows promised by the bond. Also referred to as actuarial yield or just yield.
Time to maturity
The time remaining until a financial contract expires. Also called time until expiration.
Stated maturity
For the CMO tranche, the date the last payment would occur at zero CPR.
Return-to-maturity expectations
A variant of pure expectations theory which suggests that the return that an investor will realize by rolling over short-term bonds to some investment horizon will be the same as holding a zero-coupon bond with a maturity that is the same as that investment horizon.
Remaining maturity
The length of time remaining until a bond's maturity.
Projected maturity date
With CMOs, final payment at the end of the estimated cash flow window.
Original maturity
Maturity at issue. For example, a five year note has an original maturity of 5 years; one year later it has a maturity of 4 years.
Maturity spread
The spread between any two maturity sectors of the bond market.
Maturity phase
A phase of company development in which earnings continue to grow at the rate of the general economy.
Maturity factoring
Factoring arrangement that provides collection and insurance of accounts receivable.
Maturity
For a bond, the date on which the principal is required to be repaid. In an interest rate swap, the date that the swap stops accruing interest.
Balloon maturity
Any large principal payment due at maturity for a bond or loan with or without a a sinking fund requirement.
Current maturity
Current time to maturity on an outstanding debt instrument.
