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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BALLOON PAYMENT is a final loan payment that is considerably higher than prior regular payments, in order to pay off the loan.

TIGHT MARKET is a market in which the spread, or dif­ference, between the bid and asked price of a security is extremely small. It is usually an indication that there is an abundant supply of the security and it is being actively traded. See THIN MARKET.

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