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 Incremental Cost Of Capital:
- Examples Average cost applicable to the issue of each additional unit of debt and equity irrational call option definition.
- Definition Identified Shares:
- Examples Stock or mutual fund whose purchase date and price may be identified for capital gains and tax purposes when shares sold irrational call option explain.
- Definition International Stock Exchange Of The U.K. And The Republic Of Ireland (ISE):
- Examples Organization that replaced the London stock exchange after its merger with the International Securities Regulatory Organization (ISRO irrational call option what is.
- Definition Interest Rate Floor:
- Examples An interest rate agreement in which payments are made when the reference rate falls below the strike rate. Related: Interest rate cap irrational call option meaning.
- Definition Index:
- Examples composite that measures changes in the economy or in financial markets, often expressed in percentage changes from a base year or from the previous month. Indexes measure the ups and downs of stock irrational call option abbreviation.
