nominal exercise price

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Nominal exercise price

The exercise price of a GNMA option contract, which equals the unpaid principal balance multiplied by the adjusted exercise price.
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Nominal Exercise Price

The price one pays for a Ginnie Mae pass-through. It differs from the adjusted exercise price because, before one buys the pass-through, mortgage borrowers are paying down the principals on the underlying mortgages. One calculates the nominal exercise price as follows:

Nominal exercise price = Adjusted exercise price * Total amount of the remaining principal
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

nominal exercise price

The price at which an option on a Ginnie Mae certificate can be exercised. This price is calculated by multiplying the adjusted exercise price of the option by the unpaid principal balance on the Ginnie Mae certificate. See also Ginnie Mae pass through.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
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