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Interest Coverage Test: The ratio of earnings before interest and taxes to annual interest expense. This ratio measures a firm's ability to pay interest.

Non-Operating Interest: A mineral lease interest that does not involve the rights and responsibilities of exploration, development, or production. A royalty interest is a non-operating interest.

Noninterest-Bearing Note: A note without periodic interest payment, but selling at a discount and maturing at face value. See: Zero-coupon bond.

Open Interest: The net amount of outstanding open positions, either long or short, in a given futures or options contract.

Overall Market Price Coverage: Total assets less intangibles divided by the total of the market value of the security issue and the book value of liabilities and issues having a prior claim. This is used to determine how . . . View Full Definition

Ordinary Interest: Interest based on a 360-day year instead of a 365-day year, resulting in what can be a significant difference.

Nominal Interest Rate: The stated interest rate in a note or contract, which may differ from the true or effective interest rate, especially if the lender discounts the loan and advances less than the full amount.

Net Interest Cost (NIC): The total amount of interest that will be paid on a debt obligation by a corporate or municipal bond issuer.

Mortgage Interest Deduction: A federal tax deduction for interest paid on a mortgage used to acquire, construct, or improve a residence.

Minority Interest: All shareholders whose combined shares represent less than half of the total outstanding shares issued by a corporation have a minority interest in that corporation. In fact, in many cases, . . . View Full Definition