AVERAGE LIFE Definition

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AVERAGE LIFE, in securities, is the weighted average retirement date of a bond issue or preferred stock; the average amount of time each dollar of principal amount will be outstanding.

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BOND INDENTURE is the title specifying all the obligations of the issuing company to the bondholder.

FACTORING is the practice of buying debt at a discount, e.g., if somebody owes you $10,000 payable within a year, a factoring lender may pay you $9,000 for the debt. You receive $9,000 cash quickly, but at the cost of the $1,000 discount.

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