PARTICIPATION CERTIFICATE
A security representing investment interest in an asset. Typically a mortgagebacked securities. Refer to passthrough security.
Your Free Online Legal Dictionary • Featuring Black’s Law Dictionary, 2nd Ed.
A security representing investment interest in an asset. Typically a mortgagebacked securities. Refer to passthrough security.
When a financial institution revalues collateral to make adjustments. Refer to upfront collateral.
The maximum amount payable to the insured by the insurer. AKA aggregate limit and exhaustion point.
The derivative that protects crops against precipitation. Refer to temperature derivative.
When future cash flows are brought to current value by using discount rates. Refer to discount cash flow, future value, and net present value.
When investors are lied to by the company. They are given postive news that is false to prompt them to buy. It drives up the stock price but the investor has just
An option position that occurs when options are traded with different strike prices. They have the same expiration date. Refer to bull, bear, and call spread.
The way insurance companies get their premiums. These rates are made to cover loss and still be fair. Refer to expense loading, premium loading, and pure premium.
When a bank refuses funds for an insurance company due to previous losses. It is illegal in many jurisdictions.
Using a retrocession contract to defer responsibility from the retrocedant to a retrocessionaire. Refer to cede, recessionaire, and retrocedant.
When an inthemoney option is turned into a latent option because the barrier is below the strike price. AKA kickout option. Refer to reverse knockin option.
A delay in the funding of losses until they are more affordable instead of transferring them to a third party. Refer to finite insurance contract and finite reinsurance.
A calculation where expected losses and expenses are subtracted from revenue, income from capital is added, and this amount is divided by capital to determine risks on projects being considered for investment.
Theorizing outcome from risk exposures such as foreign exchange rates, yield curve shifts, or market volatility. AKA stress testing.
When syndicate members get a discount on new issues. This is half the underwriting spread.
A nonyen bond issued by a foreign company in Japan. Refer also to Daimyo, Geisha, Samurai, and Shibosai.
When a sinking fund provision is included in a bonds indenture.
Illegally enticing business from favored clients using allocations to establish a quid pro quo arrangement.
A bank is protected if a customer defaults on a transaction by a standby letter of credit giving the bank the authority to pay the beneficiary and go after the customer to
When a plaintiff makes a motion to prove harm has occurred without having to show how or why to collect damages.