This fund could buy a highly rated, principal-only tranche and a lesser rated, interest-only tranche to fulfill its goals.

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When people pay more on these loans than is due before they mature, this increases the present value of the principal-only tranche but decreases the present value of the interest-only tranche.

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With the majority of CDOs being backed by mortgages, the principal-only tranche has a known future cash flow, but at a variable rate of return, while the interest-only tranche has both an unknown cash flow and an unknown rate of return on that cash flow.

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And the Mehdi Army and Badr Brigades -- the principal combatants in the Basra region -- are hardly the only militias at arms in Iraq.

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Jackie's well-heeled kids, each on The Forbes 400 list several times during the 1980s, would get the bulk of the principal only upon Morgan's death--maybe not for decades.

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Yet a report earlier this year into the government's foreclosure-prevention programme showed that principal was forgiven in only 2% of cases.

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Mr Esteves counters that principal investments, including proprietary trading and private-equity activity are only 15-20% of income, although this is still quite high by the newly chaste standards of Western firms.

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By making Windows virtually the only operating-system choice available to computer manufacturers, Microsoft was a principal benefactor of the boom in desktop computing.

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In official reports, however, all too often, the issue is mentioned only in passing or is relegated to a footnote -- and the principal U.N. resolution on the subject focuses on female victims of sexual violence almost to the exclusion of male victims.

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Regarding such a switcheroo as "income" is like making an interest-free loan and then telling yourself, as the debtor pays back only your principal, that you are earning a generous return on your money.

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He said that student-achievement data is only one component of the district's teacher-evaluation system, which relies heavily on principal observations.

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