Related Words

Hedge Clause: A transaction that reduces the risk of an investment.

Long Hedge: The purchase of a futures contract in anticipation of actual purchases in the cash market. Used by processors or exporters as protection against an advance in the cash price. Related: hedge, . . . View Full Definition

Lock-In Clause: A condition in a promissory note that prohibits prepayment of the note.

Lifting Clause: A provision in a junior mortgage that allows the underlying senior loan to be replaced or refinanced so long as the amount of the new senior loan does not exceed the amount of the first lien . . . View Full Definition

Market Out Clause: A clause that may appear in an underwriting firm commitment that releases it from its purchase requirement if there are negative securities market developments.

Money Market Hedge: The use of borrowing and lending transactions in foreign currencies to lock in the home currency value of a foreign currency transaction.

Multiple-Listing Clause: A provision in an exclusive listing for the authority and obligation on the part of the listing broker to distribute the listing to other brokers in the multiple-listing organization.

Multicurrency Clause: An agreement in the case of a Euro loan that permits the borrower to switch from one currency to another currency on a rollover date.

Inflation-Escalator Clause: The fact that future inflation rates are not known. It is a possible contributing factor to the makeup of the term structure of interest rates.

Inflation Hedge: Accounting practices allowing for the effects of inflation.