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.

A loan given to a municipalities project that is repaid by revenue from the project itself such as a toll road. Refer to general obligation bond.

An insurance policy that covers existing and incurred but not yet reported losses up to a dollar amount. Refer to loss portfolio transfer and retrospective finite policy.

A licensed insurer who makes accounts available to companies who prefer self insurance. Refer to agency captive, captive, group captive, protected cell company, pure captive, senior captive, and sister captive.

When a firm repos securities from a party that pays a finance charge in agreement to sell them at a higher price at a predetermined date in the future. AKA reverse, resale,

When a lender gives monthly payments to a borrower using their property equity. This is usually done by elderly homeowners resulting in the borrower eventually owning the home.

When a holder sells high coupon securities back with the understanding that at maturity, they will be able to repurchase these securities.

The relative change in the cost of an option making it a risk free rate holding all other variables constant. Refer to delta, gamma, theta, greeks, and vega.

Named to illustrate an attempt of fleeing to Rio if this strategy fails, it is an attempt to reverse losses by executing a large and risky trade.

Giving existing shareholders an opportunity to purchase new stock at current prices with the remaining available stock being sold in the open market at the future rate. AKA privileged subscription issue and

When an inthemoney option is turned into a latent option because the barrier is below the strike price. AKA kickout option. Refer to reverse knockin option.

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

Detecting actual, perceived, or anticipated financial and operating risks. Refer to risk management, risk quantification, and risk monitoring.

A delay in the funding of losses until they are more affordable instead of transferring them to a third party. Refer to finite insurance contract and finite reinsurance.

Identifying, quantifying, managing, and monitoring financial and operating risk. Refer to risk identification, risk management, risk monitoring, and risk quantification.

The tracking and reporting of exposures to risk to external stakeholders. Refer to risk identification, risk management, and risk quantification.

The higher payments made to a firm that invests in high risk ventures with the possibility of default. AKA risk margin. Refer to premium.

The concept that the level of risk can be reduced by combining uncorrelated risks. AKA pooling.

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

When an inthemoney option is created out of a latent option by pushing the barrier above the strike price. AKA kickin option. Refer to reverse knockout option.