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A bond portfolio management strategy in which cash flows from specific assets are earmarked to retire a specified set of liabilities over a period of time. Dedicated portfolios are normally immunized against interest rate risk. Dedication can either be “Cash Flow Matched” or with “Reinvestment”.

Various fixed income instruments follow set conventions to calculate interest. In the United States, money market instruments calculate interest using the actual number of days over a 360-day basis (act/360). Many U.K. commonwealth countries use an act/365 and not act/360. (U.S. credit unions also follow this act/365 day convention). U.S.…

Industries with high betas, specifically, consumer durables, properties, capital equipment.

A financial institution with the legal responsibility for safekeeping, administering and servicing customers’ assets.

Cash received on a regular basis in the form of interest, dividend etc. from investments such as stocks, fixed income securities, or mutual funds.

Newly originated mortgages represent the current coupon in mortgage issuance. In the MBS market, practitioners refer to the current coupon as the coupon trading at or near par.

An agreement between two parties providing for the exchange of a future series of interest and principal payments in which one party pays in one currency and the other party pays in a different currency. The exchange rate is fixed over the life of the swap.

Also known as foreign exchange markets, FOREX markets, and FX markets. These are the markets in which the world’s currencies are exchanged.

A reference to the likelihood that a party to a contract will default on its obligations. The greater the likelihood of default the less creditworthy is the party.

The risk that a counterparty to a contract will be unable to fulfill its obligations due to bankruptcy or other cause.

Payment trigger in a credit derivative, resulting from bankruptcy, failure to pay or restructuring.

A financial contract that protects the end user against a loss due to a credit event.