Average Effective Maturity

What is it? A calculation of the average time that securities in a taxable fixed-income fund will come due. The average is weighted according to the market value of each security. The longer the maturity ? and the higher the number ? the greater the investment risk. Average Effective Maturity takes into account mortgage payments in mortgage-backed securities, adjustable coupons on bonds, and puts. Call provisions are not included. Because of these provisions, this average is more accurate than Average Weighted Maturity.

Added By: Allison

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