Meaning IRRATIONAL CALL OPTION: The implied call imbedded in a MBS. Irrational because the call is sometimes not exercised when it is in the money (interest rates are below the threshold to refinance), and sometimes exercised when it is not in the money. Option exercise like this affects payments on the MBS
More terms such as Irrational call option in Dictionary I.
- Definition Intercommodity Spread:
- Examples market, a spread consisting of a long position and a short position in different but related commodities for example, speculating that the price relationship between the two commodities will change irrational call option definition.
- Definition Inflexible Expenses:
- Examples Expenses that cannot be adjusted or eliminated such as car payments or rental payments. Antithesis of flexible expenses irrational call option explain.
- Definition Irrelevance Result:
- Examples The Modigliani and Miller theorem that a firm's capital structure is irrelevant to the firm's value irrational call option what is.
- Definition Inflation:
- Examples The rate at which the general level of prices for goods and services is rising irrational call option meaning.
- Definition Index Fund:
- Examples designed to match the returns on a stock market index. Mutual fund whose portfolio matches that of a broad-based index such as the S;P 500 and whose performance therefore mirrors the market as irrational call option abbreviation.
