DEFINITION of 'Nominalism'

The principle of keeping the amount of a debt obligation fixed despite fluctuations in the money's purchasing power or exchange rate.

BREAKING DOWN 'Nominalism'

Nominalism puts the risk of depreciation on the creditor and the risk of appreciation on the debtor.

  1. Collateralized Debt Obligation ...

    An investment-grade security backed by a pool of bonds, loans ...
  2. Creditor

    An entity (person or institution) that extends credit by giving ...
  3. Nominal

    An unadjusted rate, value or change in value. This type of measure ...
  4. Leverage

    1. The use of various financial instruments or borrowed capital, ...
  5. Debtor

    A company or individual who owes money. If the debt is in the ...
  6. Nominal Value

    The stated value of an issued security. Nominal value in economics ...
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