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.
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.
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.
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.
Negative Pledge Clause: A bond covenant that requires the borrower to grant lenders a lien equivalent to any liens that may be granted in the future to any other currently unsecured lenders.
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
Hedge Clause: A transaction that reduces the risk of an investment.
Hold-Harmless Clause: A contract provision whereby one party agrees to indemnify and protect the other party from any injuries or lawsuits arising out of the particular transaction. Such clauses are usually found . . . View Full Definition
Incontestability Clause: Levies on the income of a business imposed by federal and state governments. This expense appears on the income statement simply as Taxes.
Word of the Day:
Income Tax: Common stock with a high dividend yield and few profitable investment opportunities.