DERIVATIVE LIABILITIES Definition

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DERIVATIVE LIABILITIES are financial instruments under contracts that have one or more underlying and one or more notional amounts. See DERIVATIVE.

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INVENTORY SHRINK, as used in retail, is reduction in physical inventory caused primarily by shoplifting and employee theft.

MORTGAGE-BACKED SECURITY is a security that returns principal and interest monthly as payments are received on the underlying mortgages. Mortgage-backed securities are made up of individual home mortgages guaranteed by the government and its agencies. The mortgages are packaged into pools by the Government National Mortgage Association (GNMA), the Federal National Mortgage Association (FNMA), the Federal Home Loan Mortgage Corp. (FHLMC) or a nongovernment-affiliated entity. Unscheduled repayment of principal can shorten the maturity of the bonds.

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