RECIPROCAL EXCHANGE
When insured parties group together to protect one another. New members are sought to prevent loss. AKA recriprocal insurance exchange.
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When insured parties group together to protect one another. New members are sought to prevent loss. AKA recriprocal insurance exchange.
The chance that an asset will be reinvested at a less than favorable rate. This can cause great loss. AKA refinancing risk or reinvestment risk. Refer to negative gap, positive gap, ratesensitive
A formula used to determine profit made by an investment or to compare several investments to determine which ones generate the most capital.
Giving existing shareholders an opportunity to purchase new stock at current prices with the remaining available stock being sold in the open market at the future rate. AKA privileged subscription issue and
The process of estimating the impact of financial and operating risks on a firm using formulas, statistics, and actuarial techniques. Refer to risk identification and risk management.
When a repurchase agreement, revolving credit facility, evergreen deposit, commercial paper, account payable, or not is renewed or reissued as it comes due providing continued funding for the debtor.
Very liquid funds in excess of those required to be held as an emergency buffer.
A computation of the expected potential of loss to determine premium rates.
An individual that encourages a short sale. This is done assuming the price will decline.
When excess risk capacity lowers premiums. This causes an expansion of business due to a more affordable premium rate. The extra capital is used to cover the new risk. Refer to hard
When investors sell commodities that suddenly increase in price leading to distorted prices. Refer to short squeeze.
Selling securities once a determined price level is obtained to protect an investor
Loss that occurs when clients are mismatched with investment opportunites. Refer to ultra vires.
The right to protect minority interest in the event of a hostile takeover bid. If the bid passes the minority can join the majority. Refer to drag along rights.
A syndicate of banks that sells notes for an issuer. They purchase the remaining unsold securities.
Daily change effecting the time value of a premium.
Stock with no voting or ownership rights. It is traded and priced independantly of a companies primary stock offerings..
A option that is ended when a barrier is breached. The addition of two options makes this option cheaper. Refer to barrier option and twin in barrier option.
The difference between the price paid and the price offered by investors. Refer to selling concession.
The estimate of how much a portfolio will lose at market risk. It measures shortcomings and uncertainty. Refer to back testing, maximum loss, and profit and loss explain.