Weighted Average Maturity (WAM): Definition, Formula, and Why It Matters for Bond Investors
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Key terms
- BondA fixed-income investment where an investor loans money to an entity (government or corporation) that borrows the funds for a defined period at a fixed interest rate.
- Treasury BondA long-term (20-30 year) debt security issued by the US government. Considered one of the safest investments, pays interest semi-annually. Used to benchmark other interest rates.
- Average Account AgeThe mean length of time all your credit accounts have been open, calculated by adding the ages of all accounts and dividing by the number of accounts. A longer average account age generally helps your credit score because it demonstrates a longer track record of managing credit. Opening several new accounts in a short period can lower this average and temporarily reduce your score.
- Room and BoardThe combined cost of housing and meal plans at a college or university, which is a significant portion of the overall cost of attendance. Room and board costs vary depending on whether you live on campus, off campus, or at home, and the type of meal plan you select. Many colleges require first-year students to live on campus and purchase a meal plan.
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