This term is generally used to denote an illegal predatory lending practice in which a lender charges an interest rate on a loan that is considered to be excessive or in violation with interest rate limits as established by some state governments. An excessively high interest rate that is overly burdensome for the borrower. A lender may set an interest rate unreasonably high if they believe that the borrower may not be able to repay the loan and interest. Limits on interest rates vary from state to state within the U.S. See: Loan shark, Usury laws

Investing Essentials

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

Term of the Day

Italian Derivatives Market (IDEM)

A derivatives market operated by the Italian Stock Exchange Council. It trades futures and options on the 30 index and individual stock options. See: Italian Stock Exchange.

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