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Negative duration |
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Negative durationOccurs when the price of an MBS moves in the same direction as interest rates.Negative duration Similar MatchesNegative externalityNegative externalityA harmful externality; that is, a harmful effect of one economic agent's actions on another. Considered a distortion because the first agent has inadequate incentive to curtail their action. Examples are pollution from factories (a production externality) and smoke from cigarettes (a consumption externality). Negative amortizationNegative amortizationA loan repayment schedule in which the outstanding principal balance of the loan increases, rather than amortizing, because the scheduled monthly payments do not cover the full amount required to amortize the loan. The unpaid interest is added to the outstanding principal, to be repaid later. Negative pledge clauseNegative pledge clauseA bond covenant that requires the borrower to grant lenders a lien equivalent to any liens that may be granted in the future to any other currently unsecured lenders. Negative NPV tie in projectNegative NPV tie in projectA negative-NPV infrastructure development project that a local government requires of a company engaged in a positive NPV investment project elsewhere in the country. Negative cash flowNegative cash flowOccurs when spending in a business is greater than earnings. Further SuggestionsNegative covenantNegative yield curve Negative convexity negative equity Negative list Negative income tax Negative working capital N Negative Amortization |
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