Category: R

Funds set aside to cover costs. They are established as contraacounts on a balance sheet. They can be hidden or implied for a security.

When a forward/future is purchased at a price less than the spot price plus the cost of carry and the difference is loaned until maturity creating a profit. Refer to cashandcarry arbitrage.

The attempt to profit by merger, acquisition, hostile takeover, recapitalization, spinoff, or other transactions based on the advice of a risk arbitrageur who analyzes future opportunities.

The spreading of exposure by combining firms with similar risk factors by risk pooling. Similar to group captive this is a retention vehicle.

Expected future claims covered by reserves paid by an insurer.

A note giving an investor a better coupon interest rate. If the interest rate falls outside the agreed upon range the investor loses the interest that day. AKA accrual note, day count

The percent a creditor or claim gets after a bankruptcy is filed. Refer to loss given default and recovery.

A technique used to analyze and graph the index price level affected by repeated transfer via buying bouts to determine when a security rises above the resistance level. This can determine the

The charting of an investment that predicts a reversal in value when the pattern shows a trough (viewed as a shoulder), followed by a rise then a lower trough followed by a

A conservative view to investing when a party avoids risk believing the overall protection is worth the long term wait.

The stability of a firms portfolio in regards to how much risk it can withstand.

A note that gives an investor better coupon rates than a RFN. If the interest rates fall short of an agreed to range the interest is lost for a period of time

In the US the registration of a new issue filed by a company to the securities and exchange commission.There are not details in this report and it must be updated often as

A sum of retained or restricted surplus placed in an account that can only be used to pay in the event that the investor has arrears from a breach of covenant or

A trade between two parties of a fixed interest rate with a floating interest rate where there is an increase in the notional principal as the result of an increase in the

A firms ability to identify their financial resources, expertise, and operating mandate to determine how much risk they are able to take.

The basic concept of the payment of a premium by someone who is unable to withstand a loss to a firm who agrees according to the terms of the policy to cover

This guarantees a borrower an interest rate on a loan for 30 to 90 days. This makes all financing costs known for the period of time. AKA lockin provision. Refer to drop

Discounting an instrument a second time. Each time a discount is given the credit risk goes up.

The first party involved in the contractual transfer of responsibility to another party.