PAYBACK RULE
The amount of time it takes to pay back investments. The investment repayment takes the form of cash flows over the life of the asset. A discount rate can be given. Refer
Your Free Online Legal Dictionary • Featuring Black’s Law Dictionary, 2nd Ed.
The amount of time it takes to pay back investments. The investment repayment takes the form of cash flows over the life of the asset. A discount rate can be given. Refer
When stock with heavy options trades near strike price of its most active option.
When the price of cash is greater than the price of the futures. Refer to basis risk and negative basis.
The amount an insurer needs to cover its expenses and generate profit. Fair premium is determined using premium loading and pure premium.
The inflaction of a wholesale purchase. It is based on the manufacturing process not the associated services. Refer to consumer price index, harmonized index of consume prices, and retail price index.
The way premium on property and causality insurance is calculated. Premium loading factors are not used in the process. AKA standard risk. Refer to speculative risk.
An agreement where an insurer agrees to absorb loss at a percent rather than a specified cash amount. Refer to surplus share.
A swap exchanging realized and implied volatility for a market reference. This is common for equith and foreign exchange markets. Refer to variable swap.
When bankruptcy is files this occurs. The company is analyzed by trustee to liquidate assets and pay off claims. This is done before a court decides what to do with the company.
The ratio between the net income and average total assets measured during an identified period of time.
The relative change in the cost of an option making it a risk free rate holding all other variables constant. Refer to delta, gamma, theta, greeks, and vega.
The concept that the level of risk can be reduced by combining uncorrelated risks. AKA pooling.
Gaining capital by purchasing and holding longterm bonds in the event of declining yields. AKA riding the curve.
New securities offered after a company has made it’s inaugural primary offering with the capital raised usually going towards refinancing or capital growth. Refer to addon.
In the event a fraud is committed per a poorly written term of an insurance policy this clause protects the insurer from having to make a settlement payment. Legal fees and judgments
A position this is borrowed or sold that benefits from depreciation. When repurchased in the market profit is made. AKA short. Refer to long position, naked short, short sale, and short seller.
An attempt to circumvent economic recession identified by excess demand and increasing inflation made by a central bank or other monetary authority. Under certain circumstances such as when fiscal policy or monetary
An illusion of an earnings boost when a company
An attempt by an investor to increase their number of outstanding shares and reduce the par value of their common stock lowering the purchase price to attract investors. Refer to reverse stock
A company with a poor credit rating implying a shaky investment history. This is also referred to as a