SHOP

See FHLMC.

A yield curve currently expected to prevail at some later date. For example, a three-month forward yield curve graphically shows a series of 3 month forward rates.

Current rate of exchange for a foreign exchange transaction scheduled to take place at a later date. Also called a forward rate, but the latter term can also refer to a forward interest rate.

Also called a deferred swap. A fixed-for-floating interest rate swap in which the swap coupon is set at the outset but the start of the swap is delayed.

An interest-rate forward contract written on a notional principal and cash settled on the basis of the difference between the contract rate and the prevailing reference rate on the settlement date. The resultant settlement value is discounted to adjust for an up-front settlement.

Also called a forward. A contract for deferred delivery traded in over-the-counter dealer-type markets. Less standardized than a futures contract but more easily tailored to commercial users’ idiosyncratic needs than futures.

Federal National Mortgage Association, pronounced Fannie Mae, is a government sponsored enterprise or GSE. FNMA is a public, shareholder owned company trading on the New York Stock Exchange. FNMA provides low-cost funds to mortgage lenders, which in turn lend to home buyers throughout the United States. FNMA supports the secondary…

Also referred to as an interest rate floor. A multi-period interest-rate option that provides a cash payment to the holder of the option whenever the reference rate is below the floor rate (also called the “floor” and sometimes the contract rate”) on a fixing date.

Notes issued with a floating rate of interest that is tied to a specified index, such as LIBOR.

A marketable debt obligation where an issuer agrees to pay a certain amount of interest over the life of the security.

A swap in which one counterparty pays a floating rate of interest while the other counterparty pays a fixed rate of interest. This is the most common type of swap.

A person who is legally authorized to supervise the investment portfolio of a third party and make investment decisions in accordance with the wishes of the beneficiary. Examples of fiduciaries include executors of wills and estates, trustees, and those who administer the assets of the underage or incompetent beneficiaries.