Category: P

When an insurer can write a large amount of policies on one line or risk.

The potential a company will file for bankruptcy. It is used to calculate the default in default models.

The amount an insurer needs to cover their expenses. Along with premium loading it is used to calculate fair premium. Refer to expense loading.

An insurance policy that includes more than two different kinds of coverage; for example, personal and commercial.

The amount of time it takes to pay back investments. The investment repayment takes the form of cash flows over the life of the asset. A discount rate can be given. Refer

When stock with heavy options trades near strike price of its most active option.

When the price of cash is greater than the price of the futures. Refer to basis risk and negative basis.

The amount an insurer needs to cover its expenses and generate profit. Fair premium is determined using premium loading and pure premium.

The inflaction of a wholesale purchase. It is based on the manufacturing process not the associated services. Refer to consumer price index, harmonized index of consume prices, and retail price index.

The way premium on property and causality insurance is calculated. Premium loading factors are not used in the process. AKA standard risk. Refer to speculative risk.

Investment capital that came in the form of stock, public offering, or addon.

When the payer can choose to pay fixed rates rather than floating rates. This occurs when the strike price have a high interest rate. Refer to reciever swapation.

The foreign exchange quotes fifth decimal point.

When an asset earns more than it costs to maintain it. Refer to negative carry.

When a company quickly buys a block of stock offering a premium to shareholder. Refer to dawn raid or saturday night special.

A written promise to pay a debt by a specific date. It can be turned to cash by transferring it to another party. See, What Is a Promissory Note? A Legal Guide

A loan whose collateral is securites that has to follow margin rules. The returns are used to purchase other securities. AKA margin loan. Refer to nonpurpose loan.

Stock shared by two companies on one certificate.

A security that pays out in other securities not cash. This occurs when a company is short on cash but has plenty of securites. Refer to reset in kind payment bonds.

The flow a deal makes through clients, banks, and firms. It shows how strong the financial sector is. AKA calendar and visible supply. Refer to shadow supply.