Your Free Online Legal Dictionary • Featuring Black’s Law Dictionary, 2nd Ed.

Category: Finance Dictionary

SELFTENDER

The buyback of stock to increase the treasury stock contra account reducing equity on the open market by a company that sporadically has additional funds.

SHIKKO YAKUIN

A corporate executive officer responsible for identifying the duties of the board of directors within the single board system in Japan.

SINGLE BOARD SYSTEM

A corporation that is overseen by one board of directors consisting of 10 to 30 members guided by a chairman (possibly the CEO) who are nominated by internal sources and elected at

SPECIALIST

The market maker in the stock exchange. They manage and balance the market at all times. They are sometimes even a dealer.

STAMP DUTY

An extra charge placed on certain legal documents by purchasing a stamp to be placed on said document.

STRAP

When a firm is long on one put and two call options with equal strike prices creating a spread to make use of market volatility to secure unlimited profit potential with minimal

SWAP

An over the counter derivative with periodic payments. They mature in 1 to 10 years. For the foreign markets it is a pair of spot and forward transactions. The spot offsets the

TAKEDOWN

The funding of a lease for 1 to 15 years. Used to fund inventory.

TERMINAL EXPOSURE

Exposure of a derivative based on its ending performance. Refer to average exposure.

TREASURY INFLATIONPROTECTED SECURITY (TIPS)

A US treasury note or bond whose profits are linked to inflation. They are sold in small amounts to make them available to retail investors.They pay coupons on a cycle with principal

UBERRIMAE FIDEI

Latin for in utmost good faith. It implies that the insured will disclose all relevant information to the insurer. The insured must also fulfill all obligations of the contract

UNLIMITED LIABILITY

When personal assets are used to absorb business failure. Refer to piercing the corporate veil.

VERTICAL LAYERING

When reinsurers assume different layers of risk. Some reinsurers will have no loss. The higher the layer the less exposed to risk. Refer to excess layer and horizontal layering.

WHENISSUED (WI) SECURITY

A security announced but not priced. It is informal but legally binding. When settled it trades like any seasoned security. Refer to to be announced and when issued treasury.

YIELD ENHANCEMENT

A strategy used to increase core returns. This is intended to be a low risk move. Refer to arbitrage speculation and hedging.

INCUBATOR

A firm offering a start up seed as venture capital. Also called accelerator

INELASTIC

The proportionate change between variables. Also called elastic or elasticity.

INTEREST COVERAGE

The way a company sees how it can manage its debt. This is also referred to as debt service coverage.

IN-THE-MONEY

When an underlying asset is worth more. Refer to atthemoney, moneyness, or out of the money.

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