Related Words

Notional Principal Amount: In an interest rate swap, the predetermined dollar principal on which the exchanged interest payments are based.

Principal Stockholder: A stockholder who owns 10% or more of the voting stock of a company. Such stockholders must report all trading in the stock to the SEC pursuant insider trading rules.

Principal-Agent Relationship: Occurs when one person, an agent, acts on the behalf of another person, the principal.

Principal Quantum Number: The quantum number that determines the size and (in hydrogen atoms) the energy of an orbital. N is used to label electron shells. N may take on integer values from 1 to infinity.

Principal Point: Point from which the focal length is measured. The principal point of a simple lens is located at the center of the lens. Compound lenses have two principal points, the location of which can . . . View Full Definition

Principal On A Note: The face amount of a note: the amount (excluding interest) that the maker agrees to pay the payee.

Principal Planes: Imaginary lines which pass through the nodal planes of a lens system.

Principal-Only (PO): A mortgage-backed security (MBS) whose holder receives only principal cash flows on the underlying mortgage pool. All the principal distribution due from the underlying collateral pool is pa . . . View Full Definition

Value Additivity Principal: An allowance to provide for changes in the value of a company's assets, such as depreciation.

Zero-Bracket Amount: A portfolio constructed to have zero systematic risk, similar to the risk-free asset, that is, having a beta of zero.