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Monthly Archives: July 2010

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Credit Derivatives – core concepts and glossary

Credit derivatives Key concepts Credit derivatives are instruments whose value is derived from that of an underlying bond, loan or other credit agreement. They are used to assume or lay off credit risk in isolation from other types of risk. The two main instruments are

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Online Finance – Computational Finance Glossary – Tongue twisters from the financial modeling world

Because so much of option pricing theory is concerned with understanding the behavior of the underlying variables, much of the terminology employed comes straight from statistics. This chapter therefore also explains the key concepts and defines the technical terms most commonly used by derivatives experts terms that may not be familiar to those outside risk management

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Derivative Instruments – Terms, concepts, and Glossary, A-Z

Introduction: Derivative instruments A security or contract whose value is dependent on or derived from the value of some underlying asset. The main classes of derivative instruments are: forwards, futures, options (and their securitized equivalents, warrants) and swaps. There are derivative contracts on currencies, commodities,

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Mortgage Backed Securities (MBS) Glossary

Adjustable Interest Rate Mortgage (ARM): The interest rate on Adjustable Interest Rate Mortgage or ARMs adjust periodically during the year based upon an established index, it can be discount rate + some basis points, or CPI based or any other index. Average Life: The average

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FAS 157 – Fair value accounting and Level 3 assets

Statements of Financial Accounting Standards No. 157, Fair Value Measurements, commonly known as “FAS 157”, is an accounting standard issued in September 2006 by the Financial Accounting Standards Board (FASB). FAS 157 became effective for entities with fiscal years beginning after November 15, 2007. Objective

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