PASSIVE LOSS RULES
Rules limiting tax deductions and income that go untaxed. This is limited by passive source earnings.
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Rules limiting tax deductions and income that go untaxed. This is limited by passive source earnings.
When deductable increases the same percent as loss incurred. This preserves and increases risk retention.
A mortgage that has profit potential protected by a companion bond instead of prepayment risk. The prepayments are accelorated for investors. AKA simaltaneous pay bond. Refer to sequential pay bond.
Risk caused by adverse movements in the market. It is preventable by diversifying. Refer to correlation and correlation risk.
The derivative that protects crops against precipitation. Refer to temperature derivative.
The speed a mortgage can be paid ahead of schedule.
The rates charged to a banks favorite corporations. The interest rate is semifloating.
When an insurer must take their share of the losses based on a fixed or variable percentage or monetary value. Refer to excess of loss agreement.
The amount an insurer needs to cover their expenses. Along with premium loading it is used to calculate fair premium. Refer to expense loading.
An audit done by a third party because the company is holding back important information. The financial statements cant be verified becasue of this. Refer to adverse and unqualified option.
This guarantees a borrower an interest rate on a loan for 30 to 90 days. This makes all financing costs known for the period of time. AKA lockin provision. Refer to drop
When insured parties group together to protect one another. New members are sought to prevent loss. AKA recriprocal insurance exchange.
Resources used to absorb risk in order to keep in the national regulatory requirements. Refer to economic capital, riskadjusted capital, tier 1 2 and 3 capital.
The second sale offering of securities under the existing issue. This helps raise benchmarks by grouping more liquidity in a smaller amount of issues.
A security that protects the firm from residual value risks. If short fall should occur principal and coupons are reduced or suspended. Refer to catastrophe bond, life acquisition cost securitization, mortgage default
The ratio between the net income and average total assets measured during an identified period of time.
The purchase of goods or services by a bank or investment bank in exchange for lucrative feebased new issue or corporate finance mandates. Refer to tying.
Identifying, quantifying, managing, and monitoring financial and operating risk. Refer to risk identification, risk management, risk monitoring, and risk quantification.
The closing of an option to obtain a lower strike price. Refer to roll forward and roll up.
An unexpected offer of tender to suddenly takeover a company rapidly. Refer to dawn raid and premium raid.