Extension Risk definition

Extension Risk. The risk that, during periods of rising interest rates, borrowers may pay off their mortgage loans later than expected, preventing a mutual fund from reinvesting principal proceeds at higher interest rates and resulting in less income than potentially available. Floating and Variable Rate Securities Risk: Floating and variable rate securities provide for a periodic adjustment in the interest rate paid on the securities. The rate adjustment intervals may be regular and range from daily up to annually, or may be based on an event, such as a change in the prime rate. Floating and variable rate securities may be subject to greater liquidity risk than other debt securities, meaning that there may be limitations on a mutual fund’s ability to sell the securities at any given time. Such securities also may lose value.
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Extension Risk. The issuer of a security may repay principal more slowly than expected because of rising interest rates. In this event, short- and medium-duration securities are effectively converted into longer-duration securities, increasing their sensitivity to interest-rate changes and causing their prices to decline. Financials Sector Risk: Concentrating assets in the financials sector may disproportionately subject the portfolio to the risks of that industry, including loss of value because of economic recession, availability of credit, volatile interest rates, government regulation, and other factors.
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Extension Risk. Extension risk is the risk that, when interest rates rise, certain obligations will be paid off more slowly than anticipated and the value of these securities will fall.
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Examples of Extension Risk in a sentence

  • At least two distinct growth scenarios display 3D-island formation: In Volmer- Weber growth, the structures emerge immediately upon the substrate before the adsorbate even forms a closed layer [1].

  • These comments will be considered in the development of the next RFA for the Extension Risk Management Education Competitive Grants Program.

  • Under this authority NIFA partners with four regional Extension Risk Management Education (ERME) Centers to carry out a national competitive grants program in Risk Management Education to educate agricultural producers about the full range of risk management activities.

  • All applications must be submitted through the Extension Risk Management online Results Verification System (RVS).

  • Southern Extension Risk Management Education Center University of Arkansas Division of AgricultureRon Rainey, Director2301 South University Ave Little Rock, AR 72204 Contact: Erica B.

  • Extension Risk: There may be no incentive, in the form of a coupon step-up, for the issuer to redeem the securities issued.

  • Holders may see their coupons cancelled while the issuer continues to pay dividends on its common equity and variable compensation to its workforce.Call Extension Risk: Some hybrids are issued as perpetual instruments callable at pre-determined levels only with the approval of the competent authority.

  • Extension Risk Management Education Aspirational Goals and ObjectivesRisk management involves taking a deliberate and knowledgeable approach to dealing with one or more of the five primary sources of agricultural risk.

  • Call Extension Risk: Some hybrids are issued as perpetual instruments, callable at pre- determined levels only with the approval of the competent authority.

  • Reports must be submitted through the online Extension Risk Management Education Results Verification System (RVS).


More Definitions of Extension Risk

Extension Risk. Extension risk applies to mortgage-backed securities. This risk exists when borrowers pay off their mortgage loans later than expected which prevents an owner of mortgage-backed securities from reinvesting principal proceeds at higher prevailing interest rates. Income Risk: Income risk is the chance that a fund’s income will decline because of falling interest rates. Index Sampling Risk: Index sampling risk is the chance that the securities selected for a fund will not provide investment performance matching that of the target index.
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Related to Extension Risk

  • Extension Term means the time period defined in §2.C.

  • Extended Term shall have the meaning given such term in Section 2.4.

  • Extension Rate means, for each distribution date following a Failed Remarketing with respect to the class A-5 notes if such notes are then in foreign exchange mode, the rate of interest payable to the related currency Swap Counterparty, generally not to exceed three-month LIBOR plus 0.75%, unless the remarketing agent, in consultation with the administrator, determine that market conditions or some other benefit to the trust requires a higher rate; provided that in each case the Rating Agency Condition is satisfied.

  • Extended Term Loans has the meaning specified in Section 2.15(a).

  • Extension Option shall have the meaning set forth in Section 2.5(c) hereof.

  • Extended Term Loan shall have the meaning assigned to such term in Section 2.21(e).

  • Second Extended Maturity Date has the meaning set forth in Section 2.10.

  • Extension Minimum Condition means a condition to consummating any Extension that a minimum amount (to be determined and specified in the relevant Extension Request, in the Borrower’s sole discretion) of any or all applicable Classes be submitted for Extension.

  • Extended Tranche has the meaning specified in Section 2.19(a).

  • Extended Loans shall have the meaning assigned to such term in Section 2.21(a).

  • Extension Amendment has the meaning set forth in Section 2.16(d).

  • Extended Maturity Date has the meaning specified in Section 2.17(a).

  • Replacement Revolving Facility Effective Date shall have the meaning assigned to such term in Section 2.21(l).

  • Replacement Revolving Commitments shall have the meaning assigned to such term in Section 2.22.

  • Extension Date has the meaning specified in Section 2.19(b).

  • Non-Extending Lender has the meaning specified in Section 2.18(b).

  • Non-Extension Notice has the meaning specified in Section 2.10.

  • Renewal Term has the meaning set forth in Section 2.