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What is an A-note?
An A-note describes a slice of the top tranche of an asset-backed security. Asset-backed securities are categorized into tranches for quality, and an A-note is a share of the best available tranche.
Asset-backed securities include Collateralized Mortgage Obligations (see — CDOs), Mortgage-Backed Securities, Credit Card Debt, and other kinds of cash flows, especially related to debt instruments that have been pooled and sold to investors. This shifts the risk from the lending institution to the underwriters and investors in the asset-backed security.
Ratings are given to institutions and to debt issuances based on their creditworthiness, and and these might include AAA, AA, A, BBB, and so on. These pools of debt cash flows are organized into tranches based on the riskiness of the loan and partially the time horizon of the debt obligations.
The classifications of tranches are not quite as specific as the credit ratings of their underlying companies and debt issues: the class A tranche might contain all of the “A” ratings. This is the senior tranche, which is serviced before all of the other ones, and, in fact, sometimes using actual cash flows from the other tranches.
In case of a bankruptcy, the B tranche and C tranche will be serviced after the A tranche, if at all. A-notes are like shares of the class A tranche, and function like bonds.
What are the Tax Implications for Making a Profit (or Loss) On a Stock?
Gains on stock investments will be taxable in the current year unless they can be offset with losses
What is a Lump-Sum Distribution from a 401(k)?
Lump sum distributions are when the entire balance of an account is paid out at once
What are the 403(b) Contribution Limits?
403(b) contribution limits are currently the same as 401(k) limits, and are adjusted for inflation at the same rate
What is IRS Publication 505, Tax Withholding and Estimated Tax?
Publication 505 serves as a guide to make sure all goes smoothly for people and their withholding requirements
What are Current Assets?
Current Assets are items on a balance sheet that are either cash or are going to be cash in the near future
What is secondary market?
The secondary markets are where most trading goes on today, where the trades are made investor-to-investor using shares
What are Small Cap Mutual Funds?
Mutual funds that invest heavily in companies that are small, but not micro-size, can be described as small cap funds
How to use Bollinger Bands in trading
Bollinger Bands are used in technical analysis to discern what range a security is likely to trade within
What is Accrued Revenue?
Accrued Revenue refers to the revenue that a business has earned for goods or services already provided but has not yet received payment for.
What is the Broadening Wedge Ascending (Bullish) Pattern?
The Broadening Wedge Ascending pattern forms when a currency pair price progressively makes higher highs and higher lows