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Tel: (612) 246-4616
CURRENCY SWAP is an exchange of two currencies according to an agreement to re-exchange the currencies at the same rate at a specified future date. During the term of the agreement, exchanges of interest payments denominated in the respective currencies also may occur.
PREPAYMENT RISK, in the area of mortgage-backed securities, which are backed by loans on property, is the possibility that home owners will payoff their mortgages early, returning the investor's principal earlier than expected. This typically occurs during a declining interest rate environment, when home owners can refinance at lower rates, leaving investors vulnerable to the risk of reinvestment at lower rates.
DISCLAIMER is a statement that the auditor is unable to express an opinion as to the presentation of financial statements in conformity with U.S. GAAP.
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