Business and Personal Finance Dictionary

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• SYNTHETIC IO-ETTE
  
  A REMIC (q.v.) bond with a small principal amount and a huge coupon rate. It absorbs some of the interest payment when market conditions demand that most REMIC bonds have a lower coupon than the collateral. (Its coupon must be less than 1200% for an Agency IO-ette, because of limitations of the Fed's Book Entry system).
  
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