Bookmark and Share

FISCAL LEVERAGE is the ability of a government to affect economic conditions and/or actions of others through fiscalist policies.

Learn new Accounting Terms

CONVEXITY is the price change that occurs for a bond not accounted for or predicted by modified dU1"ation. Convexity explains why price change estimates using modified duration increase in error as the yield changes, generally by more than 100 basis points. Bonds with positive (negative) convexity have increased (decreased) duration as interest rates fall (rise). Bonds with positive convexity, such as those with put options, have returns higher than those predicted by duration alone. Mortgage-backed securities and callable bonds gener­ally have negative convexity, which means that the price increase predicted by duration for a steep rate decline is too high.

MILLAGE is a rate (as of taxation) expressed in mills per dollar.

Suggest a Term

Enter Search Term

Enter a term, then click the entry you would like to view.