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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FEDERAL HOME LOAN MORTGAGE CORPORATION (FHLMC) is a private corporation chartered by the U.S. Government that issues pass-through securities, known as participation certificates, based on conventional mortgages. FHLMC pass-throughs are traded in a very liquid market and are used as collateral for other activities such as repurchase agreements. FHLMC guarantees the timely payment of interest and ultimate payment of principal. FHLMC is commonly called "Freddie Mac".

ORDER OF PERMANENCE is where fixed assets are entered in the balance sheet in descending order of permanence (i.e. land first, then buildings, then equipment ...).

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