RISK PHILOSOPHY
A firms formal take on corporate goals, activities, and stakeholders expectations regarding risk activities. Refer to risk tolerance.
Your Free Online Legal Dictionary • Featuring Black’s Law Dictionary, 2nd Ed.
A firms formal take on corporate goals, activities, and stakeholders expectations regarding risk activities. Refer to risk tolerance.
When a variable rate of interest is exchanged for a fixed rate of interest to accommodate flexibility between two terms experiencing different financial needs. Refer to variable principal swap.
The market where securities are purchased and sold between investors, not the issuing companies. The New York Stock Exchange and NASDAQ are examples of secondary markets. This scenario creates an unpredictable environment
Default more commonly seen in international transactions resulting in a loss when one party fails to deliver after the other party has fulfilled their part of a contract. AKA clean risk and
The percentage of shares sold short that a firm holds indicating an expected increase or decline in the market.
The prevention of the issuer of a bond by an indenture preventing the recovery of the bond until the attainment of a certain price or a distinct percent of the conversion price
A contract granting the issuer of a bond a fixed spread for a short time before the trade is complete. This guarantees the price will be a reference not a spread. Refer
An attempt to generate value by the way an assets dynamic movement in the market is described without considering the assets history. Refer to markov process.
The deviation of the focus of a hedge fund or investment company to generate alternate investment opportunities. This change in consistency may be risky because the new opportunity may not have been
A forward agreement to buy undrawn loans or credit agreements. The investor gets a commitment fee. AKA synthetic credit facility.
The smallest amount that can be traded in bonds and securities.
A banks core capital in the form of stocks, earnings, and reserves. Refer to tier 2 capital and economic capital.
A financial institution that cannot fail without effecting the market. So they are granted help from central bank and possibly given bail out.
When futures, options, and equity settle on the same day. This happens once each quarter.
Issuing securities on the primary market for an issuer. Or the act of predicting risk to ensure the possible gains are worth the risk. Refer to allornone underwriting, best efforts underwriting, and
a building that does not have any contents or inhabitants.
When distressed assets of uncertain worth are sold at a deep discount. Refer to fire sale and vulture fund.
An unsophisticated investor. They are protected from fraud or bad advice. Refer to aunt millie.
An over the counter swap with floating interest. The principal is notational. This type of exhange is also called index amoritizing rate, accreting, amoritizing, reverse index principle, or a variable principle swap
A corporation controlled by a family. Refer to outsider system.