CAPITAL COMMITMENT Definition

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CAPITAL COMMITMENT is an agreement to undertake capital expenditure at some set time in the future which has not yet become an actual liability.

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ACCRUAL BOND is a bond on which interest accrues, but is not paid out to the investor during the time of accrual; instead, the accrual interest is added to the amount of remaining principal and paid at maturity. Also known as an accretion bond or a Z-bond in a CMO issue. See Collateralized Mortgage Obligation.

UNSYSTEMATIC RISK, in securities, is price fluctuations resulting from the unique characteristics of specific securities. Unsys­tematic risk generally is eliminated in a well diversified portfolio. Also known as non-systematic risk.

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