STRAPS Definition

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STRAPS is Stated Term Rate Auction Preferred Stock; issues having a fixed dividend rate, usually for three to five years. After this period, the security becomes an auction-rate preferred and the holder can sell the stock at par on the date of the first auction. STRAPs trade like and are com­pared to a short-term sinking fund preferred stock.

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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.

FIRM QUOTATION is the requirement that a Market Maker execute an order from another broker/dealer at its displayed price for the normal unit of trading, or for its displayed size, whichever is greater.

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