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

Category: Finance Dictionary

SWAP SPREAD

The difference between the swap rate and the benchmark government bond rate. The wider the spread the worse the credit.

TAKEOUT

Replacing one mode of financing for another.

TERMINAL WORSTCASE RISK EXPOSURE

Expected exposure of a derivative based on the worse performance of an underlying market resource. Refer to average expected, average worst case and terminal expected risk exposures.

TREASURYEURODOLLAR (TED) SPREAD

The difference between the eurodollar deposits and treasury bills that mature at the same time. The less the difference the more business improvement.

ULTIMATE NET LOSS

the sum that the insurer or its representatives are legally required to pay through legal ruling or settlement. This sum can included medical and investigative costs.

UNMATCHED BOOK

A portfolio with different maturity rates. It increases the risk exposure but also increases profit possible. Refer to gap, gapping, matched book, open book, and mismatch.

VERTICAL MERGER

When companies that make different elements of a product join forces. This is done when one company wants to control much of the process. Refer to conglomerate and horizontal merger.

WHENISSUED TREASURY (WIT)

Treasury bills that are announced but not yet priced. Upon settling they will sell as any treasury bill would. Refer to to be announced and when issued security.

Z SCORE

The probability of bankruptcy. It is based on five financial ratios.

INFLATION SWAP

A swap of actual and fixed inflation rates. They mature in 10 or more years and are structured as annual inflation or a zero coupon inflation swap. Also called a consumer price

JUST CAUSE

A reason that is legally acceptable or sufficient. A request’s just cause is essential to get certain court action. Also known as good cause.

KEIRETSU

A group of companies who have a shared interest but are not organized into a central company. Refer to Chaebol.

KEY PERSON

Individual whose loss may cripple an organization. Knowledge, creativity, inspiration, reputation, and/or skills are essential assets for organizational viability and growth.

KICKER PATTERN

Trend reversal candlestick pattern. Rather reliable predictor that a change in the direction of a trend is occurring. The fundamentals of a company being researched begin to show change along side this

KNOCKED DOWN (KD)

An article taken apart, folded, or telescoped to reduce its shipping size by at least one third (33 1/3 percent) of its assembled bulk or size. Such articles, be they bicycles, fans,

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