LADDER Definition

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LADDER is a form of diversification in which investments with widely varying maturities are held within an invest­ment portfolio. Spreading investments over a range of maturities reduces interest rate risk on reinvestment by averaging out interest rate cycles. This strategy assures a continuous cash flow over time with some potential sacrifice of optimum total return.

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REPO is a contract under which the seller of securities, such as Treasury Bills, agrees to buy them back at a specified time and price. Also called repurchase agreement or buyback. See REPURCHASE AGREEMENT.

OPEN ACCOUNT is a non-guaranteed payment arrangement, e.g. similar to department store credit. Goods are purchased and delivered without payment. Future payment for delivered goods is dependent on the good faith of the purchaser.

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