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Home Categories Fixed Income Trading Liquidity preference theory refers to the demand for money as measured by liquidity. Negative arbitrage is the lost profits of holding debt proceeds in escrow until the project can actually be funded. Negative bond yield is when an investor receives less money on redemption of the bond than the original purchase price of the bond. An out-of-competition tender is an offer to purchase Treasury securities made by smaller investors. Non-marketable securities are assets that cannot be cashed out easily and in a timely manner or at minimal cost. A normal yield curve is a yield curve in which short-term debt instruments have a lower yield than long-term debt instruments of the same credit quality. Prepayment risk is the risk associated with the early repayment of principal on a fixed income security. Realized yield is the actual profit earned during the investment’s holding period and may include dividends, interest payments, and other cash payments. The reinvestment rate is the return that an investor expects to receive after reinvesting cash flows received from previous investments. A waiver occurs when one party refuses to honor a contract with the other party.