Interest-only strip (IO)

Definition:

A security based solely on the interest payments from a pool of mortgages, Treasury bonds, or other bonds. Once the principal on the mortgages or bonds has been repaid, interest payments stop, and the value of the IO falls to zero.

Investing Essentials


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

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Public limited partnership

A limited partnership with an unlimited number of partners that is registered with the SEC and is available for public trading by broker/dealers.

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