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

Category: Finance Dictionary

INFLATION

When currency loses its value due to constantly raising prices.

INTEREST RATE

The cost of borrowing funds or the capital earned on loaned funds.

INTRODUCING BROKER

A broker who helps their client with their strategy. They cannot hold funds to they use the FCM.

JUMBO LOAN

The lender’s portfolio must hold these loans or sell them to private investors. Fannie Mae and Freddie Mac limit criteria is exceeded by this type of mortgage.

JUS SANGUINIS

A person’s citizenship is by ‘blood’, that of the parents. This rule is followed in most countries of the world. Canada and US use Jus Solis (where born) instead.

KEEPWELL AGREEMENT

A parent company and a subsidiary imitate such a contract to guarantee the subsidiary all necessary financing over a specified time-period. The parent company provides this. This contracted support gives potential lenders

KEY PERFORMANCE INDICATORS (KPI)

Key business statistics as measures of a firm’s performance in critical areas. Typically, monitoring is essential for such business activities that would likely cause severe losses or outright failure if done incorrectly.

KICKER

Compensatin offered to a bank so a company can use its services. Refer to equity kicker, carrot equity, and sweetner.

KNOCK OFF

1. A very similar looking product copy a patented, trademarked, or copyrighted product or work that is cheaper as an illegal version. 2. A cheaper version of a higher-priced material or product

KNOWLEDGE-BASED PAY

Earnings system that compensates employees skill level proficiency and gained education. The employee incentive is improve skills set and education. Reaching certain goals in education, training and skill development translates into higher

LAG

The time it takes an insurance claim to process.

LAPSE OF OFFER

Offer termination, regardless of the reason, other than completion of the deal. An offer lapses due to (1) expiration date reached; (2) a reasonable period has gone by, having no specified expiration

LAST SALE

Commodity or security price on last transaction executed and posted on an exchange.

LATTICE MODEL

A pricing model that uses an assets ending value and calculates backwards to manage the fund.

LAW OF THE SITUATION

That conflicts be resolved based on the facts of the situation. Human relations school of management concept. Rejects references to relative superiority of any party over the other. Oddly promotes the resolutions

LEAD MANAGER

Coordinating bank or underwriting firm for an underwriting syndicate as the organizer and a member. Launch and sale of the issue of securities underwritten by the syndicate are primary roles of this

LEADING PRACTICE

Where it is inordinately difficult to identify or implement a best practice, this team is used instead.

LECTURE

Subject matter expert’s formal presentation and a question-and-answer session that typically follows.

LEGAL REALISM

A perspective that legal rules are to benefit the larger society and public policy based on judicial decisions. Neither dogma or supernatural authority applies. A court is expected to determine ‘legal rights’

LENGTH OF SERVICE

how long a person has worked at a company or has belonged to an organization. Longevity in a position; duration of service or employment.

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