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Half-Life

[HAF-lyfe]

What is the definition of Half-Life?
In the context of mortgage-backed securities, half-life refers to the point in time at which half of the principal amount of the security has been repaid.
Using Half-Life in an Example

For a mortgage-backed security with a principal of $2 million, the half-life is reached when $1 million has been repaid by the borrowers whose mortgages constitute the security.

Using Half-Life in a sentence

During the investment meeting, the portfolio manager discussed the half-life of our mortgage-backed securities to evaluate their performance and risk.

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