An INSURER that writes INSURANCE policies through a direct selling process or an exclusive AGENCY arrangement, or a REINSURER that accepts ceded RISKS directly from other insurers rather than REINSURANCE BROKERS.

The RISK of loss arising from exposure to the direction of a reference ASSET or market. An investor holding a LONG POSITION experiences a loss if market prices fall and a gain

An individual acting as AGENT of the shareholders of a company. A director is responsible, along with other members of the BOARD OF DIRECTORS, for overseeing the activities of the executive management

A situation where a CENTRAL BANK or monetary authority does not adjust the nation

The price of a BOND inclusive of ACCRUED INTEREST. Most SECONDARY MARKET bond transactions are based on dirty prices. See also CLEAN PRICE, INVOICE PRICE.

Transferred COMMON STOCK that fails to convey good title to the new buyer as a result of errors or omissions in form or authorization.

A DEDUCTIBLE on an INSURANCE contract that the INSURED is not obligated to cover if losses exceed a particular threshold. If the threshold is breached the INSURER pays the insured a CLAIM

The RISK of loss arising from damage to physical infrastructure which prohibits the use of real estate, plant and equipment, technology and communications leading to a halt in operations; the disaster may

A financial measurement technique used to evaluate the worth of capital investments, ACQUISITIONS, or other projects involving cash inflows and outflows over time. Net CASH FLOWS are discounted at a company

A customer brokerage account where the client gives the BROKER authorization to act on his/her behalf in buying and selling securities. The client may limit the discretion granted through time and/or price

A state where a company with MONOPOLY power charges different prices in different markets, according to the characteristics of each market. This presumes the monopolist can clearly identify the source of demand

The process of removing voting rights from a class of COMMON STOCK so that investors in that class are only entitled to RENT RIGHTS. See also DISENFRANCHISING TRANSACTION.

A financial restructuring transaction, such as a DUAL CLASS RECAPITALIZATION, that removes voting rights from certain COMMON STOCK investors. DISINTERMEDIATION The process of removing financial institutions, including BANKS, INVESTMENT BANKS, and SECURITIES

An ASSET, generally a security or real property that features a sharply reduced value as a result of actual or potential losses created by an excess of CREDIT RISK, MARKET RISK, or

A RISK that is unique to a company, ASSET, or market, meaning that it can be reduced or eliminated by holding a PORTFOLIO of assets that are uncorrelated. Also known as IDIOSYNCRATIC

A spreading or dispersion of RISK, achievable by combining ASSETS or exposures that are not CORRELATED with one another; the process of diversification helps minimize concentrations of exposure and creates a more

A CORPORATE FINANCE transaction where a company sells a subsidiary or a portion of its operations to a third party. A divestiture typically occurs when the company no longer views the ASSETS

INSURANCE contracts on the same property and PERIL purchased by the INSURED from two or more INSURERS. The total SETTLEMENT will never exceed the amount of the loss, and will be divided

A financial transaction involving the sale, and future repurchase, of MORTGAGEBACKED SECURITIES for cash. Through the exchange the selling party effectively borrows money from the purchasing party on a collateralized basis for

An AUCTION MARKET featuring multiple sellers and buyers, who have full transparency into dealings. In the double auction process the first BID or OFFER is given priority, the high bid and low