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

  • UCPDC
    UCPDC ‘Uniform Customs and Practice for Documentary Credit’ developed by the International ...
  • Tax Incentives
    Tax Incentives is tax benefits. Most tax incentive measures fall into one or more of the ...
  • Primary beneficiary
    Primary beneficiary allows beneficiary of a life insurance policy who is first entitled ...
  • Accrued benefits
    Accrued benefits are the pension benefits earned by an employee accourding to the years ...
  • Prime Lending Rate (PLR)
    Prime Lending Rate (PLR) is the rate of interest charged on loans by banks to their most ...