Category: P

A percent of new issue held by the manager to offer to the institutions investors.

The time a company is preparing to file for bankruptcy. Directors try to preserve value as the creditors will paid first.

A questionable practice of downplaying negative business traits and overemphasizing the positive ones.

A contract allowing the buyer to sell an asset back at strike price. This occurs at or before the maturity date. They are written based on a broad range of commodity and

Using overfunded pension plans to start new endeavors.

When deductable increases the same percent as loss incurred. This preserves and increases risk retention.

An option that allows investors to redeem their bonds if a trigger event occurs. The sudden redemption reduces cash value and makes the stock less attractive to the buyer.

The amount of risk associated with a financial investment with uncertain value. AKA risk equivalent exposure.

A new bond floated to pay an existing bond issue. This occurs at the first call date. Proceeds are invested in low risk securites until the original bond is redeemable. This is

When a dealer or trader sell all or some of a money losing position.

When a company buys an option on its own stock. This is done through a middle man generating gain even if stock value declines. Refer to loss equity put.

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.

When a portfolio is managed using minimum effort. This occurs when an index seldom moves their assets. Refer to active index strategy and index fund.

Cash flow paid to oil producing nations. It is rerouted to the western banking system.