Definition

Adjusted exercise price

Adjusted exercise price is a term which is used in options on Ginnie Mae (Government National Mortgage Association) contracts. The final exercise price of the option accounts for the coupon rates carried on Ginnie Mae mortgages.

For example, if the standard GNMA mortgage has an 9% yield, the price of GNMA pools with 13% mortgages in them is altered so that the investor receives the same yield.

Share it:  Cite

More from this Section

  • Money position manager
    Money position manager is the managerial position within a bank that is responsible for ...
  • Unearned premium reserve
    Unearned premium reserve allows liability reserve of an insurance company that represents ...
  • Term loans
    Term loans is the credit extended for longer than one year and designed to fund longer-term ...
  • Real money balances
    Real money balances is the quantity of money in real terms. ...
  • Traditional IRA
    Traditional IRA is an IRA that allows workers to deduct part or all of their IRA contributions ...