Secured loans
An annual measure of the time value of money that fully reflects the effects of
compounding.
Effective annual yield
Annualized interest rate on a security computed using compound interest
techniques.
Effective call price
The strike price in an market redemption provision plus the accrued interest to
the redemption date.
Effective convexity
The convexity of a bond calculated using cash flows that change with yields.
Effective date
In an interest rate swap, the date the swap begins accruing interest.
Effective duration
The duration calculated using the approximate duration formula for a bond with
an embedded option, reflecting the expected change in the cash flow caused by
the option. Measures the responsiveness of a bonds price taking into account
that expected cash flows will change as interest rates change due to the
embedded option.
Effective margin (EM)
Used with SAT performance measures, the amount equal to the net earned
spread, or margin of income, on assets in excess of financing costs for a given
interest rate and prepayment rate scenario.
Effective rate
A measure of the time value of money that fully reflects the effects of
compounding.
Effective spread
The gross underwriting spread adjusted for the impact that the common stock
offerings announcement has on the firms share price.
