DEFINITION of 'Weighted Average Maturity  WAM'
The weighted average of the time until all maturities on mortgages in a mortgagebacked security (MBS). The higher the weighted average to maturity, the longer the mortgages in the security have until maturity. Also known as "average effective maturity".
INVESTOPEDIA EXPLAINS 'Weighted Average Maturity  WAM'
The measure is calculated by totaling each mortgage value represented by the MBS. The weights of each mortgage is found by dividing the value of each into the total of all. To arrive at the WAM number the weight of each security is multiplied by the time until maturity of each mortgage, and then all the values are added together. For example say an MBS has three mortgages valued at $1,000, $2,000 and $3,000 (a total of $6,000) and mature in one, two and three years respectively. The weights of these are 1/6 (1,000/6,000), 1/3 (2,000/6,000) and 1/2 (3,000/6,000). The WAM is 2 1/3 years (1/6 x 1 year + 1/3 x 2 years + 1/2 x 3 years).

Mortgage
A debt instrument, secured by the collateral of specified real ... 
Weighted Average Remaining Term ...
The remaining life of an assetbacked security or a mortgagebacked ... 
Commercial MortgageBacked Securities ...
A type of mortgagebacked security that is secured by the loan ... 
MortgageBacked Security (MBS)
A type of assetbacked security that is secured by a mortgage ... 
Dwarf
A slang term used to describe a pool of mortgage backed securities ... 
PassThrough Security
A pool of fixedincome securities backed by a package of assets. ...

How can I create a yield curve in Excel?
You can create a yield curve in Microsoft Excel if you are given the time to maturities of bonds and their respective yields ... Read Full Answer >> 
What are the different formations of yield curves?
There are three main different formations of yield curves: normal, inverted and flat yield curves. The yield curve describes ... Read Full Answer >> 
What is the difference between the rule of 70 and the rule of 72?
The rule of 70 and the rule of 72 give rough estimates of the number of years it would take for a certain variable to double. ... Read Full Answer >> 
On what basis does the sustainable growth rate fluctuate?
The main difference between a bond’s yield to maturity, or YTM, and the spot rate is that the YTM uses the same interest ... Read Full Answer >> 
What are some classes I can take to prepare for the Series 6 exam?
The riskreturn tradeoff for bonds is the increased yield investors can obtain from corporate and other types of bonds that ... Read Full Answer >> 
What level of return on equity is average for companies in the chemicals sector?
The modified duration is an adjusted version of the Macaulay duration and takes into account how interest rate fluctuations ... Read Full Answer >>

Credit & Loans
Understanding The Mortgage Payment Structure
We explain the calculation and payment process as well as the amortization schedule of home loans. 
Professionals
Why You Should Avoid Fixating on Bond Duration
Financial advisors and their clients should then focus on a bond fund’s portfolio rather than relying on any single metric like duration. 
Investing
The Case For Stocks Today
Last week, U.S. equities advanced with the S&P 500 Index notching new records. Investors are now getting nervous with rate and currency volatility spiking. 
Mutual Funds & ETFs
Why You May Want To Be (And Stay) In Bonds
Bonds are complicated, and it’s easy to feel intimidated or confused. Fortunately, you don’t need to be a numbers geek to be an informed investor. 
Investing
Why Some Investors Are Tilting Toward TIPS
Last month’s fiveyear TIPS auction drew nearly $48 billion in interest, a sign of recent renewed demand for this inflation indexed asset among investors. 
Mutual Funds & ETFs
The EMAG Emerging Mkts Bond ETF: Worth the Risk?
The Market Vectors Emerging Markets Aggregate Bond ETF (EMAG) might offer longterm rewards, but is now the best time to jump in? 
Mutual Funds & ETFs
5 Dividend ETFs with Growth Potential
A quick look at a few ETFs with substantial growth potential. 
Bonds & Fixed Income
Using Excel PV Function to compute Bonds PV
To determine the value of a bond today  for a fixed principal (par value) to be repaid in the future at any predetermined time  we can use an Excel spreadsheet. 
Investing
Should You Buy Marijuana Stock?
The legalization of marijuana has created a new investment niche: pot stocks. 
Economics
What Does Accretive Mean?
In the business world, accretive most often to refers to additional growth from outside sources.