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Interest only strip (IO) |
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Interest only strip (IO)A security based solely on the interest payments from a pool of mortgages, Treasury bonds, or other bonds. Once the principal on the mortgages or bonds has been repaid, interest payments stop, and the value of the IO falls to zero.Interest only strip (IO) Similar MatchesMatured noninterest bearing debtMatured noninterest bearing debtOutstanding savings bonds and notes that have reached final maturity and no longer earn interest. Includes all Series A-D, F, G, 1, J, and K bonds. Series E bonds (issued between May 1941 and November 1965), Series EE (issued since January 1980), Series H (issued from June 1952 through December 1979), and savings notes issued between May 1967 and October 1970 have a final maturity of 30 years. Series HH bonds (issued since January 1980) mature after 20 years. Interest rate swapInterest rate swapAn arrangement in which two parties agree to exchange periodic interest payments, at agreed intervals, over an agreed period, but without any principal being paid. The most common and simplest deal involves one party paying a fixed rate of interest and the other paying a floating rate. IRSs are used for hedging, speculation or arbitrage. Deferred interest mortgageDeferred interest mortgageInterest is not paid during the deferral period. When the period is over, the accumulated interest is added to the original loan. Some lenders add this interest to the total of your loan to give a new loan figure and new interest payments. Others calculate your interest payments on the original loan as normal and then spread the repayment of the deferred interest over a set period of time. The latter method is better for you, as adding the deferred interest to the loan means you end up paying interest on the deferred interest! Interest sensitive insurance policyInterest sensitive insurance policyA cash value life insurance policy whose insurance dividend rates vary with respect to inflation, enabling the policyholder to avoid the loss of purchasing power associated with inflation. Earnings before interest, taxes, depreciation, and amortization (EBITDA)Earnings before interest, taxes, depreciation, and amortization (EBITDA)A financial measure defined as revenues less cost of goods sold and selling, general, and administrative expenses. In other words, operating and nonoperating profit before the deduction of interest and income taxes. Depreciation and amortization expenses are not included in the costs. Further Suggestionsgross intereststepped interest debenture stocks interest rate Market interest rate Interest Future Interest Earnings before interest after taxes (EBIAT) High withholding tax interest income Rate of interest Applied or nominal interest rate Imputed interest reversionary interest Compound interest Variable Interest Rate interest receivable prevailing interest rate Earnings before interest and, taxes (EBIT) Interest only loan Interest rate parity line (IRP) Nominal interest rate Interest rate Interest Interest expense Covered interest rate Uncovered interest parity |
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