ASSET BACKED SECURITY Definition

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ASSET BACKED SECURITY is a debt instrument collateralized by credit card receivables, auto loans or other assets and securitized by a bank or financial institution. To reduce the possibility of a disruption in principal and interest payments, the cash flow from these assets is enhanced by a variety of methods including letter of credit support, insurance, overcollateralization and excess interest.

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LEAD-TIME is the time between the initial stage of a project or policy and the appearance of results, for example, the long lead-time in oil production because of the need for new field exploration and drilling.

CAPITAL RESERVE is a fund set aside for specific purposes, thereby cannot be distributed for other uses. See also REVENUE RESERVE.

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