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

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.

A decision guided by cost/benefit analysis made by a firm to control, retain, eliminate, or expand its risks. Refer to risk identification, 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.

Loss control, loss financing, and risk reduction methods used to manage risks.

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

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

Preserving a portion of financial and/or operating risk as opposed to transferring or hedging. Refer to hedging, retention, group, risk transfer, and selfinsurance.

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

A calculation where expected losses and expenses are subtracted from revenue, income from capital is added, and this amount is divided by capital to determine risks on projects being considered for investment.

The closing of an option to obtain a lower strike price. Refer to roll forward and roll up.

Presentations organized by a firm introducing a new issue of securities to possible investors. AKA dog and pony show.

The process of estimating the impact of financial and operating risks on a firm using formulas, statistics, and actuarial techniques. Refer to risk identification and risk management.

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.

When a repurchase agreement, revolving credit facility, evergreen deposit, commercial paper, account payable, or not is renewed or reissued as it comes due providing continued funding for the debtor.

A risk reducing strategy that involves closing out nearby or next nearby derivative contracts and then repurchasing to push out the maturity date. AKA stack and roll. Refer to strip hedge.

When an exchange traded derivative is bought and sold quickly.