Effective margin (EM)

Definition:

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.

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Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

Term of the Day

Life expectancy

The length of time that an average person is expected to live, which is used by insurance companies use to make projections of benefit payouts.

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