Category: V

An indirect tax placed on goods and services paid by producers and consumers. This tax is added at each manufacturing stage adding value. Refer to ad valorem.

The date a transaction is complete. AKA settlement date.

The estimate of how much a portfolio will lose at market risk. It measures shortcomings and uncertainty. Refer to back testing, maximum loss, and profit and loss explain.

Insurance that pays out an agreed upon amount if loss should occur. Commonly life insurance. Refer to indemnity contract.

A standard financial transaction. They have the greatest liquidity and smallest spread.

The price changes that occur compared to a %1 volatility change.

Funds invested in new high risk opportunities. This is done in exchange for preinitial public equity stake. Most technology and biotechnology get their starts here. Refer to down round and mezzanine financing.

When reinsurers assume different layers of risk. Some reinsurers will have no loss. The higher the layer the less exposed to risk. Refer to excess layer and horizontal layering.

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.

When a directors duties are given to creditors before insolvency occurs. This protects assets in the failing business.

Means overpowering force. An unavoidable event that will effect the profits of the firm. Risk transfer is sought in this case. Refer to force majuere.

Any good brought into or shipped out of a country. A key element in balance of trade or balance of payment accounts. Refer to invisible.

A strategy that uses volatility rather than market direction. Refer to directional strategy.

A german corporation’s management board. Refer to aufsichtsrat.

Means your account. A local account held for a foreign interest. This helps the company do local currency business. Refer to nostro.

a building that does not have any contents or inhabitants.