Also found in: Dictionary, Thesaurus, Medical, Encyclopedia.
Effective margin (EM)
Used with SAT performance measures, the amount equal to the net earned spread, or margin of income, on assets in excess of financing costs for a given interest rate and prepayment rate scenario.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
The profit margin produced from an asset if one assumes financing at a certain interest rate. That is, one calculates potential profits as if income remains constant but cost of funds varies. See also: Effective yield.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved