Datasets:
sohomghosh
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FinRAD_Financial_Readability_Assessment_Dataset

Dataset card Data Studio Files Community
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terms
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smog_index
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coleman_liau_index
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dale_chall_readability_score
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COMPANY FORMATION
In the United Kingdom, the process of forming a company, which includes sending required information to the Registrar of Companies , indicating compliance with the provisions of the Companies Act, and providing the actual ARTICLES OF ASSOCIATION and MEMORANDUM OF ASSOCIATION.
palgrave
0
-11.43
24.8
0
16.84
26.4
11.94
34.5
27
COMPANY LIMITED BY GUARANTEE
In the United Kingdom, a company that does not issue SHARES and whose LIABILITIES are limited to the amounts noted in the MEMORANDUM OF ASSOCIATION. See also COMPANY LIMITED BY SHARES.
palgrave
0
38.82
11.7
0
10.67
9.7
8.48
11.25
11.36
COMPANY LIMITED BY SHARES
In the United Kingdom, a company that issues SHARES and whose LIABILITIES are limited to the value of the shares, as noted in the MEMORANDUM OF ASSOCIATION. See also COMPANY LIMITED BY GUARANTEE.
palgrave
0
37.81
12.1
0
10.38
10.1
8.28
12.25
12.66
COMPENSATING BALANCE
A non-interest-bearing DEMAND DEPOSIT placed by a customer with a BANK to compensate for LOANS or other services granted.
palgrave
0
43.73
11.9
0
13.23
13.6
12.06
11.5
11.81
COMPETITION COMMISSION (CC)
In the United Kingdom, a body estab- lished in 1998 that ensures antiMONOPOLY and free competition rules are upheld, particularly as related to MERGERS and ACQUISITIONS. The work of the Commission is nonbinding and must be referred to the Office of Fair Trading for enforcement. The CC replaced the original Monopolies and Mergers Commission and Restrictive Practices Court.
palgrave
0
43.43
12
14.6
13.81
14
10.86
13.666667
15.31
COMPETITIVE BID
A BID submitted in an AUCTION MARKET process that is placed in direct competition with other bids, meaning it will only be filled if it ranks at, or near, the highest price/lowest YIELD. See also NON.
palgrave
0
70.13
8
0
8.06
9.1
10.23
9
9.42
COMPETITIVE BID UNDERWRITING
An UNDERWRITING of a NEW ISSUE of SECURITIES that is awarded by the issuing company to the UNDERWRITER that proposes the most favorable terms (generally a combination of lowest YIELD, low- est fees, broadest distribution, and strongest research and SECONDARY TRADING support). See also BEAUTY CONTEST, NEGOTIATED UNDERWRITING.
palgrave
0
21.74
16.2
0
15.67
17.9
12.72
18
17.93
COMPETITIVE TENDER
A general process where a company acquires goods or services by extending to suppliers an invitation to tender a proposal. In gen- eral, the tender with the lowest price wins the order, although quality, ship- ping, timeliness, and efficiency may also be factors.
palgrave
0
41.19
12.9
0
11.31
13.5
11.31
15.25
15.11
COMPLETION BOND
A GUARANTEE provided by an INSURER to a BANK, which is financing a project, that the bank will be repaid even if the project fails to be completed. See also PERFORMANCE BOND, SURETY BOND.
palgrave
0
71.14
7.6
0
7.83
8.4
9.59
11.5
13.86
COMPLETION RISK
In PROJECT FINANCE, the RISK that a project will not be completed as scheduled, leading to difficulties in servicing contracted DEBT.
palgrave
0
50.16
11.5
0
13.11
14.4
12.2
14.5
16.02
COMPLEX CHOOSER OPTION
An OVER-THE-COUNTER COMPLEX OPTION that permits the buyer to choose between an underlying CALL OPTION (with a certain STRIKE PRICE and MATURITY) and an underlying PUT OPTION (with a different strike and maturity) between trade date and choice date. See also CHOOSER OPTION.
palgrave
0
41.19
12.9
0
12.82
14.6
7.64
13.75
10.46
COMPLEX OPTION
A conventional OPTION that is modified with respect to time, price, and/or payoff to produce unique RISK MANAGEMENT, INVESTMENT, or speculative results. Certain complex options have riskypayoffs/LIABILITIES and demand considerable technical resources to ensure proper pricing and management. Also known as EXOTIC OPTION. See alsoCOMPLEX STRUCTURED PRODUCT, COMPLEX SWAP, PATH-DEPENDENT OPTION, PATH-INDEPENDENT OPTION.
palgrave
0
15.68
14.4
13.4
20.23
17.7
12.94
8.875
15.13
COMPLEX SWAP
An OVER-THE-COUNTER SWAP that is modified with respect to time, price, NOTIONAL PRINCIPAL, and/or payoff to produce unique RISK MANAGEMENT, INVESTMENT, or speculative results. Certain complex swaps have risky payoffs/LIABILITIES and demand considerable technical resources to ensure proper pricing and management. Also known as EXOTIC SWAP. See also COMPLEX OPTION, COMPLEX STRUCTURED PRODUCT.
palgrave
0
32.6
12
13
17.62
15.5
12.64
8.625
12.87
COMPLIANCE
The processes used by BANKS and other FINANCIAL INSTI- TUTIONS to ensure adherence to the legal and regulatory rules governing their business.
palgrave
0
32.22
14.2
0
14.1
15.5
12.62
16
17.89
COMPOSITE PEG
A MANAGED FOREIGN EXCHANGE RATE policy where a country’s CENTRAL BANK or monetary authority pegs the value of its CUR- RENCY to a basket of several other currencies. See also SINGLE PEG.
palgrave
0
46.78
10.7
0
9.97
9.4
9.86
10.5
11.4
COMPOUND OPTION
An OVER-THE-COUNTER COMPLEX OPTION that allows the buyer to EXERCISE into a second underlying option. Compound options are available in four forms, including a CALL ON A CALL (the right to buyan underlying CALL OPTION), a CALL ON A PUT (the right to buy an underlying PUT OPTION), a PUT ON A CALL (the right to sell an underlying call), and a PUT ON PUT (the right to sell an underlying put). Also known as NESTED OPTION.
palgrave
0
53.85
12.1
12.5
7.72
12.5
7.58
15.5
11.84
COMPOUNDING
The process of adding periodic INTEREST to an interest- bearing ASSET or LIABILITY, increasing the FUTURE VALUE to the INVESTOR or CREDITOR and LIABILITY to the BORROWER. Compounding can be com- puted in simple or complex form via the following:Simple compounding:FV = PV (1 + (t r))Annual compounding:FV = PV (1 + r)tAnnual compounding, n times per year:FV = PV (1 + (r/n))tnContinuous compounding:FV = PV ertwhere PV is the PRESENT VALUE of the sum invested or borrowed, r is the DISCOUNT RATE, t is the time to maturity, n is the number of compounding periods per year, and e is the exponential constant.
palgrave
0
5.33
24.6
0
11.8
27.3
12.23
35.5
25.17
COMPS
Abbreviation for “comparables”: (1) A retailer’s comparable same-store sales, allowing period-on–period comparison of expansion or con- traction. (2) Proxy companies that can be used to provide additional pricing information for an INITIAL PUBLIC OFFERING of a new company’s STOCK issue.
palgrave
0
-11.43
24.8
0
17.71
27.8
14.7
33
29
COMPTROLLER
See CONTROLLER.
palgrave
0
77.91
2.9
0
7.1
12.5
11.63
0
0.8
COMPULSORY LIQUIDATION
In the United Kingdom, a process where the courts require the LIQUIDATION of a company, either through the official RECEIVER who acts in a temporary capacity, or through a court-appointed pro- visional LIQUIDATOR. See also CREDITORS’ VOLUNTARY LIQUIDATION.
palgrave
0
26.81
14.2
0
15.08
15.2
10.4
15.5
18.13
CONCENTRATION RISK
The RISK of loss arising from a large position in a single ASSET or market exposure. An excessive concentration can give rise to LIQUIDITY RISK or MARKET RISK losses.
palgrave
0
56.76
8.9
0
9.33
8.2
9.26
8.75
12.7
CONCERT PARTY
A group of SPECULATORS who band together to quietly acquire COMMON STOCK in a company, either to deflect attention prior to a public TAKEOVER offer (legal) or to avoid disclosure rules (which may be illegal).
palgrave
0
27.49
18.1
0
11.15
19.5
10.79
24.5
18.57
CONCURRENCY
The process of ensuring that the terms and conditions of multiple REINSURANCE CONTRACTS are synchronized so that no gaps or overlaps in RISK coverage exist.Payoff profile of long condorPayoff profile of short condorSee also BUTTERFLY SPREAD.
palgrave
0
26.48
18.5
0
16.2
23.5
12.88
27
22.18
CONFIRMATION
A paper document or electronic slate that confirms all necessary details regarding a TRADE between two parties. The confirmation, which contains pertinent information related to trade size, price, reference ASSET/INDEX, CASH FLOWS, PREMIUM, fees, and SETTLEMENT, can be cre- ated in a manner that makes it legally binding on both parties.
palgrave
0
37.13
14.4
0
14.39
17.9
12.33
18.25
18.04
CONFIRMED LINE
See ADVISED LINE.
palgrave
0
93.81
0.9
0
1.52
3.6
9.05
0.5
1.2
CONSEIL D’ADMINISTRATION
The EXECUTIVE BOARD of a French company that uses the DUAL BOARD SYSTEM. See also CONSEIL DU SURVEILLANCE.
palgrave
0
53.88
8
0
8.96
6.3
10.22
5
8.04
CONSEIL DU SURVEILLANCE
The SUPERVISORY BOARD of a French company that uses the DUAL BOARD SYSTEM. See also CONSEIL D’ADMINISTRATION.
palgrave
0
37.47
10.1
0
11.68
8.6
9.63
4.75
8.11
CONSENSUS EARNINGS
An average of EARNINGS forecasts developed by financial analysts that follow the STOCK of a particular company. See alsoEARNINGS SURPRISE.
palgrave
0
27.49
11.9
0
15.17
11.6
10.45
7.5
16
CONSOB
See COMMISSIONE NAZIONALE PER LA SOCIETA E LA BORSA.
palgrave
0
62.34
6.8
0
8.67
6.1
16.36
5.5
12.49
CONSOL
In the United Kingdom, abbreviated form of Consolidated Fund Annuities, representing PERPETUAL DEBT issued by the government as part of its GILT program. Consols, which form part of the government’s TAX REVENUE account at the BANK OF ENGLAND, are redeemable at PAR VALUE at the government’s discretion, but in practice are never redeemed. See alsoIRREDEEMABLE SECURITY.
palgrave
0
35.57
12.9
14.1
14.39
14.3
10.49
13
13.91
CONSOLIDATED ACCOUNTS
See CONSOLIDATED FINANCIAL STATEMENTS.
palgrave
0
-34.11
19
0
26.1
21.8
15.68
3
21.6
CONSOLIDATED DISPLAY
In ELECTRONIC TRADING, the minimum infor- mation that must be displayed according to REGULATION, including prices, quantities, and tickers of the NATIONAL BEST BID AND OFFER of a given SECURITY, along with consolidated information on last sales.
palgrave
0
8.54
21.3
0
14.98
23.7
12.73
28.5
25.61
CONSOLIDATION
(1) A form of MERGER where two companies combine to form an entirely new company. (2) An ACCOUNTING process where the FINANCIAL STATEMENTS of group companies and SUBSIDIARIES are com- bined into a single set of ACCOUNTS that reflects the entire financial standing of the group. For any subsidiary that is not fully owned, the relevant percent- age that is not owned must be adjusted as a MINORITY INTEREST. (1) See also ACQUISITION. (2) Also known as FULL .
palgrave
0
40.35
17.3
0
10.28
21
10.63
25.75
20.22
CONSORTIUM UNDERWRITING
An UNDERWRITING process in the INSURANCE market where a group of LLOYD’S OF LONDON underwriting SYNDICATES write business on behalf of other syndicates.
palgrave
0
31.21
14.6
0
15.55
16.7
9.58
16.5
14.42
CONSTRUCTIVE TOTAL LOSS
In INSURANCE, damage to property or ASSETS that is so significant that the cost of restoration is determined to be greater than the value of the restoration.
palgrave
0
52.53
12.6
0
10.74
14.9
9.07
17.5
16.73
CONSUMER PRICE INDEX (CPI)
An INFLATION measure used in the United States, Mexico, and other countries, based on the retail prices of a weighted index basket of market goods and services, including transportation, housing, health, and food. CPI is used as a reference in certain INFLATION- LINKED SECURITIES and INFLATION SWAPS. See also HARMONIZED INDEX OF CONSUMER PRICES, PRODUCER PRICE INDEX, RETAIL PRICE INDEX.
palgrave
0
42.72
12.3
13.6
13.34
14.5
9.89
13.333333
13.33
CONTANGO
A market state where FUTURES prices are higher than expected SPOT prices and decline as EXPIRY of the CONTRACT approaches. Also known as FORWARDATION. See also NORMAL BACKWARDATION.
palgrave
0
53.58
8.1
9.7
12.21
9.1
10.3
5
9.43
CONTINGENCY LOAN
A LINE OF CREDIT that a company arranges in advance of a loss and invokes when one or more TRIGGER events occur; unlike a traditional BANK line of CREDIT, the contingency loan can only be drawn to cover losses arising from a defined event. See also CONTINGENT CAPITAL.
palgrave
0
55.58
11.5
0
9.23
12.2
10.09
14.5
12.1
CONTINGENCY RESERVE
A RESERVE, established by INSURERS as a per- centage of total retained surplus, which is used to cover unexpected losses and any shortfall in a previously declared DIVIDEND.
palgrave
0
26.14
16.6
0
12.42
17.1
12.92
20
19.77
CONTINGENT CAPITAL
A contractually agreed PRE-LOSS FINANCING facility that a company accesses in the aftermath of a loss event. Funding may take the form of CONTINGENT DEBT (i.e., COMMITTED CAPITAL FACILITIES, CONTINGENCY LOANS, CONTINGENT SURPLUS NOTES), or CONTINGENT EQUITY (e.g., PUT PROTECTED EQUITY, CATASTROPHE EQUITY PUT).
palgrave
0
15.31
16.6
0
15.78
18.3
12.62
20
19.71
CONTINGENT CLAIM
(1) A financial CONTRACT or ASSET whose value is dependent on other assets or INDEXES, e.g., a DERIVATIVE. (2) A claim in BANKRUPTCY that may become a DEBT based on the occurrence of a future event.
palgrave
0
34.94
17.3
0
7.96
17.9
13.32
24
21.07
CONTINGENT DEBT
A class of DEBT FINANCING that becomes effective once a defined TRIGGER has been breached; the class includes COMMITTED CAPITAL FACILITIES, CONTINGENT SURPLUS NOTES, CONTINGENCY LOANS, and FINANCIAL GUARANTEES. See also CONTINGENT CAPITAL.
palgrave
0
29.35
13.3
0
17.75
16.4
12.59
13.75
16.3
CONTINGENT EQUITY
A class of EQUITY FINANCING that becomes effect- ive once a defined TRIGGER has been breached; the class includes LOSS EQUITY PUTS and PUT PROTECTED EQUITY. See also CONTINGENT CAPITAL.
palgrave
0
47.79
10.3
0
11.53
10.6
10.7
11
11.33
CONTINGENT LIABILITY
(1) The LIABILITY of an institution that assumes the role of a GUARANTOR or endorser under a LETTER OF CREDIT,GUARANTEE, or SURETY BOND. (2) ACCOUNTING and RISK classification of an undrawn REVOLVING CREDIT FACILITY granted by a BANK to a borrower.(1) See also CONTINGENT CREDIT RISK.
palgrave
0
7.87
23.6
0
12.38
26.1
13.13
34
27.97
CONTINGENT SURPLUS NOTES
A form of PRE-LOSS FINANCING where an INSURER or REINSURER issues NOTES to INVESTORS via a TRUST if a pre- defined loss-making TRIGGER event occurs. The issuance provides funding to compensate for losses sustained. See also CONTINGENT CAPITAL.
palgrave
0
50.12
9.4
11.9
12.34
10.4
12.16
7.666667
10.34
CONTINGENT TRIGGER
A COVENANT in a CREDIT agreement requiring a BORROWER to undertake certain actions (such as repaying DEBT, selling ASSETS, issuing COMMON STOCK) in the event a predefined TRIGGER event occurs. Common triggers include a CREDIT RATING downgrade or breach of a financial ratio, often those related to LIQUIDITY, LEVERAGE, or INTEREST COVERAGE.
palgrave
0
28.17
15.8
0
14.22
17.8
13.73
18.5
18.86
CONTINGENTS TO ASSETS
A measure of a company’s off BALANCE SHEET financial LEVERAGE, or the degree to which contingent LIABILITIES feature in overall operations. It is computed as:where Con is the company’s contingent liabilities, TA is the company’s totalASSETS.The higher the ratio, the greater the company’s financial leverage.
palgrave
0
14.8
16.8
0
16.13
17.5
10.72
17.75
15.22
CONTINUOUS COMPOUNDING
The process of COMPOUNDING the INTEREST on a DEPOSIT on an instantaneous, rather than periodic, basis. The general factor for continuous compounding for a 1-year period is derived from the base of the natural logarithm e, and is given as er where r is the ANNUAL PERCENTAGE RATE. See also CONTINUOUS DISCOUNTING, FUTURE VALUE.
palgrave
0
44.75
11.5
15.5
10.9
11.4
10.38
13.666667
15.35
CONTINUOUS DISCOUNTING
The process of DISCOUNTING a CASH FLOW on an instantaneous, rather than periodic, basis. The general factor for continuous discounting for a 1-year period is derived from the base of the nat- ural logarithm e, and is given as e-r where r is the COST OF CAPITAL. See alsoCONTINUOUS COMPOUNDING, PRESENT VALUE.
palgrave
0
53.92
10
14.1
9.97
10.5
9.66
12.333333
13.07
CONTRA-ACCOUNT
An account in a dual entry ACCOUNTING system that offsets or reverses the value of another account. Common contra-accounts include ACCUMULATED DEPRECATION as a contra-account to fixed,depreciable ASSETS, LOAN LOSS RESERVES as a contra-account to LOANS, and TREASURY STOCK as a contra-account to EQUITY.
palgrave
0
23.77
15.4
0
15.66
17.3
11.55
16.5
14.25
CONTRA-LIQUIDITY
The opposing side of a TRADE, generally used in the con- text of BLOCK TRADES. ALGORITHMS and SMART ORDER ROUTERS handling an ORDER attempt to detect contra-liquidity in DARK POOLS and on EXCHANGES in order to try to get the best EXECUTION price and the quickest fill.
palgrave
0
56.08
11.3
0
9.81
12.6
10.18
14.25
13.66
CONTRA-TRADING
The practice of buying and selling SHARES within the same SETTLEMENT period so that no payment need be made. Contra-trading is typically found in DAY TRADING, where a SPECULATOR purchases shares during the day and closes out the position before the close of business; since both transactions settle on the same day (e.g., T + 3), the speculator has no gross cash outflow.
palgrave
0
40.01
15.4
0
11.09
17.5
10.27
20.25
16.27
CONTRACT
A legal agreement between two parties that specifies actions, duties, and payments. A contract is only enforceable if it is based on legal activ- ities and involves the exchange of consideration (i.e., each party to the contract provides some value). See also MISREPRESENTATION.
palgrave
0
48.5
10
9.7
12.46
11.6
10.59
7.5
9.44
CONTRARIAN
An INVESTOR with a view that runs contrary to popular market sentiment or belief. Contrarians may be willing to take RISK or provide LIQUIDITY when other parties cannot, or will not. See also BOTTOM FISHING.
palgrave
0
59.6
7.9
9.7
9.55
7.7
9.63
6.166667
9.25
CONTROL PREMIUM
The incremental value paid for a TARGET company in an ACQUISITION, reflecting the perceived benefits of being able to control management; in general this value is inversely proportional to the quality of management and its ability to maximize value.
palgrave
0
6.51
22
0
14.23
23.6
10.83
32.5
25.86
CONTROL STOCK
(1) A special class of COMMON STOCK that carries enhanced voting rights, allowing its SHAREHOLDERS greater influence and control over operations. (2) A block of common stock held by a large share- holder, sufficient to permit influence and control over operations; the block need not necessarily be equal to 50% + 1 share, it may be some smaller amount. See also DUAL CLASS STOCK.
palgrave
0
47.96
14.4
0
11.21
18
10.21
20
16.41
CONTROLLER
A professional within a company that is responsible for finan- cial and ACCOUNTING matters. Also known as COMPTROLLER.
palgrave
0
36.96
10.3
0
12.5
9.5
11.1
6
12.49
CONVENIENCE YIELD
The nonmonetary RETURN that is derived from hold- ing an ASSET, such as not facing a shortfall in the event of excess DEMAND. The existence of a convenience yield creates an incremental RETURN that is included in FORWARD PRICE computations related to FUTURES or FORWARDS.
palgrave
0
48.64
12.1
0
11.78
13.6
11.07
14.75
15.22
CONVERSION ARBITRAGE
An ARBITRAGE strategy that takes advantage of mispricing of OPTIONS in relation to PUT-CALL PARITY. The strategy may involve the purchase of “undervalued” OPTIONS and the sale of SYNTHETIC OPTIONS, or the sale of “overvalued” options and the purchase of synthetics. A RISK-free profit can be generated if the undervalued/overvalued options are truly mispriced.Conversion arbitrage strategy
palgrave
0
27.11
14.1
16.3
16.59
16
9.92
14.666667
16.05
CONVERSION FACTOR
A multiplicative factor that is applied to a DELIVERABLE ASSET under an EXCHANGE-TRADED DERIVATIVE CONTRACT to determine the precise amount that needs to be delivered. Since different types and grades are often deliverable, the seller of the contract must use a conversion factor to make the appropriate adjustment. See also CHEAPEST-TO-DELIVER.
palgrave
0
37.3
12.3
14.6
15.19
14.3
10.67
12.5
13.86
CONVERSION PARITY
The MARKET VALUE of the SHARES of COMMON STOCK into which a CONVERTIBLE BOND can be exchanged, generally com- puted as:Convpty = Convratio (S)where Convratio is the CONVERSION RATIO and S is the stock price. Also known as CONVERSION VALUE, PARITY. See also CONVERSION PREMIUM, CONVERSION PRICE, INVESTMENT VALUE.
palgrave
0
38.32
11.9
14.6
12.87
12.5
10.02
12.166667
13.07
CONVERSION PREMIUM
The additional amount an INVESTOR in a CONVERTIBLE BOND pays above CONVERSION PARITY to acquire the bond, generally expressed as a percentage of parity:(100%)⎠where PCB is the price of the convertible bond and Convpty is conversion par- ity. See also ADJUSTED BREAKEVEN, CONVERSION PRICE, CONVERSION RATIO, CONVERSION PARITY, EQUIVALENT BREAKEVEN, INVESTMENT PREMIUM, SIMPLE BREAKEVEN.
palgrave
0
27.15
16.2
0
17.18
21
11.41
22.5
18.95
CONVERSION PRICE
The price at which an INVESTOR holding a CONVERTI- BLE BOND exchanges the bond for SHARES of COMMON STOCK, computed as:where ParCB is the PAR VALUE of the convertible bond and Convratio is the CONVERSION RATIO. See also CONVERSION PARITY, CONVERSION PREMIUM.
palgrave
0
50.16
11.5
0
11.84
13.4
11.07
15
15.07
CONVERSION RATIO
The number of SHARES of STOCK an INVESTOR receives in converting the CONVERTIBLE BOND, computed via:where ParCB is the PAR VALUE of the convertible bond and Convprice is the initial CONVERSION PRICE. See also CONVERSION PARITY, CONVERSION PREMIUM.
palgrave
0
43.73
11.9
0
13.98
14.1
10.81
14
13.92
CONVERSION VALUE
See CONVERSION PARITY.
palgrave
0
9.21
12.7
0
11.15
11.5
14.31
2.5
27.87
CONVERTIBILITY RISK
The RISK of loss arising from an inability to convert local CURRENCY into a fully CONVERTIBLE CURRENCY and/or to repatri- ate convertible currency back to a home country as a result of EXCHANGE CONTROLS. A subcategory of SOVEREIGN RISK.
palgrave
0
34.76
13.3
0
11.55
12.2
9.46
13.75
12.93
CONVERTIBLE BOND ARBITRAGE
A quantitative ARBITRAGE strategy where an INVESTOR or HEDGE FUND manager purchases a CONVERTIBLE BOND and simultaneously HEDGES or neutralizes the RISK on two of the three factors that influence the price of the convertible bond: STOCK PRICE, CREDIT SPREAD, and INTEREST RATE. The intent is to gain exposure to the remaining factor at a relatively inexpensive price.
palgrave
0
33.58
15.8
0
13.82
18.2
11.34
22
20.57
CONVERTIBLE CURRENCY
A CURRENCY that can be freely exchanged into another currency for any purpose, without regulatory restrictions. Convertible currencies are generally associated with open and stable economies, and their prices are typically determined through SUPPLY and DEMAND forces in the FOREIGN EXCHANGE market. Also known as HARD CURRENCY. See alsoCONVERTIBILITY, EXOTIC CURRENCY, NONCONVERTIBLE CURRENCY, RESERVE CURRENCY.The standard convexity calculation for a fixed income SECURITY with semiannual COUPONS is given by:+where C is COUPON, t is the time to MATURITY, y is the semiannual yield, n is the number of semiannual periods, and M is the redemption value of the bond (generally PAR VALUE). Also known as OPTIONALITY. See also NEGATIVE CONVEXITY, NONLINEAR INSTRUMENT, POSITIVE CONVEXITY.
palgrave
0
18.35
15.4
16.9
15.78
15.8
10.95
19.5
16.02
COOKIE JAR ACCOUNTING
The practice of liberally interpreting, or manipulating, ACCOUNTING rules in order to convey a stronger financial position. Smoothing income flows, reversing RESERVES, and capitalizing costs that should be expensed are forms of cookie jar accounting. Also known asCOOKING THE BOOKS.
palgrave
0
32.6
12
13.6
16.05
13.9
12.19
9
14.32
COOKING THE BOOKS
See COOKIE JAR ACCOUNTING.
palgrave
0
50.5
7.2
0
8.7
7.7
7.78
2
11.6
COOLING OFF PERIOD
In the US markets, the period between the filing of a final PROSPECTUS and the offering of a NEW ISSUE of SECURITIES to INVESTORS in the public market. The cooling off period is typically 20 days.
palgrave
0
53.21
10.3
0
7.89
8.6
10.23
11.5
11.64
CORE INFLATION
A measure of INFLATION at the consumer level, exclud- ing certain items such as food and oil. See also CONSUMER PRICE INDEX, HARMONIZED INDEX OF CONSUMER PRICES, RETAIL PRICE INDEX.
palgrave
0
64.71
8
0
10.37
9.9
9.12
7.5
8.67
CORNERING
An attempt to gain sufficient market share in an ASSET or SECURITY in order to manipulate the price for gain. Cornering attempts, which are generally illegal, are usually unsuccessful unless the asset is very thinly traded.
palgrave
0
36.28
12.7
0
12.06
12.2
10.23
13
16.09
CORPORATE ACTIONS
Events undertaken by CORPORATIONS that impact SHAREHOLDERS, including STOCK SPLITS, STOCK BUYBACKS, SPIN-OFFS, MERGERS, or ACQUISITIONS.
palgrave
0
21.4
14.3
0
23.78
22.2
15.29
13
18.9
CORPORATE CHARTER
An authorizing document issued by a government or legal authority that delineates the activities a CORPORATION is permitted to undertake. See also ARTICLES OF INCORPORATION.
palgrave
0
8.03
15.2
0
15.94
12.9
11.84
11.75
21
CORPORATE CONTROL MARKET
The broad marketplace for transactions that are designed to change the ownership, structure, and/or control of a com- pany. Common corporate control transactions include MERGERS, friendly orHOSTILE TAKEOVERS, LEVERAGED BUYOUTS, MANAGEMENT BUYOUTS, and RECAPITALIZATIONS. In some national systems the corporate control market also serves as a monitoring mechanism for GOVERNANCE purposes.
palgrave
0
28.84
13.5
15
19.49
18.2
12.22
12.833333
15.43
CORPORATE ETHICS
The broad area dealing with the way in which a com- pany behaves toward, and conducts business with, its internal and external STAKEHOLDERS, including employees, INVESTORS, CREDITORS, custom- ers, and REGULATORS. In certain national systems minimum standards arerequired or recommended in order to eliminate potential conflicts of interest or client/employee mistreatment.
palgrave
0
20.21
16.8
0
18.28
21
13.88
20.25
21.96
CORPORATE FINANCE
(1) The general class of financial transactions that a company may consider to alter its structure, operations, or busi- ness focus, including MERGER, ACQUISITION, DEMERGER, DIVESTITURE, RECAPITALIZATION, LEVERAGED BUYOUT, or MANAGEMENT BUYOUT. (2) General FINANCING activities carried out by a company through the CAPITAL MARKETS.
palgrave
0
-16.51
26.7
0
18.52
31.1
14.29
39.5
28.67
CORPORATE SUSTAINABILITY
The concept and action of ensuring that a corporate organization exists in perpetuity, providing returns and benefits for multiple generations of internal and external STAKEHOLDERS. Sustainability generally demands close ties and cooperation with a broad constituency of INVESTORS, customers, CREDITORS, employees, and REGULATORS, as well as the surrounding community.
palgrave
0
-4.16
19.9
0
19.96
21.6
13.87
22.25
26.13
CORPORATION
Any company that issues COMMON STOCK to INVESTORS in order to raise CAPITAL; a corporation may be public or private, and is gen- erally organized with LIMITED LIABILITY. See also JOINT STOCK COMPANY, LIMITED LIABILITY COMPANY, PUBLIC LIMITED COMPANY.
palgrave
0
17.84
15.6
0
13.23
13.9
9.06
16.25
12.93
CORPUS
The PRINCIPAL component of a BOND. See also COUPON.
palgrave
0
66.91
5
0
4.14
3.3
10.88
2.25
10.69
CORRECTION
A temporary reversal of a SECURITY price or broader market sector lasting several days to several months; though the retracement is not as severe as it is in a BEAR MARKET, prices may ultimately fall by 20% from the previous peak. See also BEARISH, BULL MARKET.
palgrave
0
48.13
12.3
0
9.52
12.2
9.93
15.5
14.42
CORRELATED CREDIT RISK
The RISK of loss arising from CREDIT EXPOSURE that increases precisely as a COUNTERPARTY’s ability to perform declines, or when COLLATERAL taken as SECURITY deteriorates in tandem with a counterparty’s ability to pay. A subcategory of CREDIT RISK. See alsoCONTINGENT CREDIT RISK, DIRECT CREDIT RISK, SETTLEMENT RISK, SOVEREIGN RISK, TRADING CREDIT RISK.
palgrave
0
20.08
14.8
15.5
15.19
14.6
9.96
13.333333
15.38
CORRELATION
A statistical measure that indicates the extent to which two or more variables (such as financial ASSET prices) move in the same direc- tion, or different directions. Correlation is often used to price and manage certain COMPLEX DERIVATIVES (e.g., MULTI-INDEX OPTIONS), quantifyPORTFOLIO RISK exposures, and determine appropriate HEDGE RATIOS. See also CORRELATION COEFFICIENT, CORRELATION RISK.
palgrave
0
19.06
15.1
15.9
17
16.9
12.3
14.166667
15.32
CORRELATION COEFFICIENT
A standard measure of CORRELATION, typically computed as:A perfect positive correlation coefficient (+1) means a unit change in the price of one reference leads to the same unit change in the price of the second; a per- fect negative correlation coefficient (-1) means they move in equal but opposite directions; a correlation of 0 indicates prices are uncorrelated, or independent. See also CORRELATED CREDIT RISK, CORRELATION RISK.
palgrave
0
20.55
18.7
0
13.76
21.1
10.95
25.75
21.16
CORRELATION RISK
The RISK of loss arising from a change in the histor- ical relationships, or CORRELATIONS, between ASSETS. Correlation risk can be found in certain COMPLEX OPTIONS and COMPLEX SWAPS and may also impact HEDGE RATIOS, CREDIT PORTFOLIO MODELS, and VALUE-AT-RISK models. A subcategory of MARKET RISK.
palgrave
0
47.49
10.4
10.5
12.52
12
10.57
8.333333
10.47
COST INFLATION
INFLATION that results from increased costs of produc- tion, including raw materials and labor. Higher production costs are priced into goods and services, leading labor to demand higher wages to meet the higher prices; the resulting rise in labor costs is also priced into the final goods and services, raising the overall rate of inflation. See also DEMAND INFLATION, MONETARY INFLATION.
palgrave
0
42.41
12.4
13
13.17
14.1
10.34
13.166667
12.05
COST, INSURANCE, FREIGHT (CIF)
The declared value of imported goods, including the cost of purchase and associated INSURANCE and shipping charges from the point of EXPORT to the point of IMPORT. CIF does notinclude duties or the cost of freight within the country of import. See also FREE ON BOARD (FOB).where rD is the average cost of debt, TR is the corporate tax rate (where 1 – TR provides benefits in the form of a TAX SHIELD), rE is the average cost of equity (or expected return to COMMON STOCK shareholders), D is total amount of debt, and E is total amount of equity.The formula can be further expanded to include a specific cost and amount of PREFERRED STOCK, if such capital features on the BALANCE SHEET.
palgrave
0
38.32
18.1
16.7
9.36
20.6
10.68
21
20.95
COST OF CARRY
The FUTURE VALUE of costs and benefits associated with holding an ASSET, which typically includes the cost of FINANCING, INSURANCE, transportation and/or storage, less benefits derived from lending the asset and any CONVENIENCE YIELD. Cost of carry is used to determine theoretical FUTURES prices and ARBITRAGE opportunities.
palgrave
0
22.24
16
0
16.6
18.3
12.19
17.75
18.76
COST OF GOODS SOLD (CGS)
The direct costs attributable to the produc- tion of goods, including the cost of raw materials and production inputs, as well as direct labor costs. CGS excludes administrative expenses, INTEREST, TAXES, and DEPRECIATION. See also REVENUE.
palgrave
0
33.92
11.5
12.5
13.38
11.4
11.69
7.666667
13.69
COST OF RISK
The implicit or explicit price a company must pay to man- age its RISK exposures; typically it comprises of the expected costs and dir- ect and indirect losses arising from RISK RETENTION, LOSS CONTROL, LOSS FINANCING, and RISK REDUCTION activities.
palgrave
0
22.42
20.1
0
12.78
23.3
12.73
32
27
COUNTERPARTY
An institution that is a party to a financial transaction with CREDIT RISK, such as a LOAN, DERIVATIVE, or FINANCING.
palgrave
0
42.72
12.3
0
9.98
11.6
10.16
15
18
COUNTERVAILING CREDIT
A mechanism of granting CREDIT in a com- mercial transaction without disclosing the name of one of the two parties. The FINANCIAL INSTITUTION standing between seller and buyer of goods on credit issues documentation to the buyer in its own name, so disguising the identity of the seller.
palgrave
0
38.66
13.8
0
11.55
14.1
10.42
16
16.27
COUNTRY RISK
The RISK of loss due to adverse economic events or political instability within a country; country risk is often considered to be larger inscope than SOVEREIGN RISK as it includes actions that affect private sector, as well as governmental, obligations. A subcategory of CREDIT RISK.
palgrave
0
31.72
14.4
0
13.18
14.8
11.77
15.25
16.11
COUPON
The periodic INTEREST CASH FLOW payable by an ISSUER or BORROWER to an INVESTOR or LENDER for the use of DEBT-based CAPITAL. Coupon payments may be based on FIXED or FLOATING RATES, and may be payable on a weekly, monthly, quarterly, semiannual, or annual basis, or accrued until final MATURITY of the LIABILITY. See also CORPUS, PRINCIPAL.
palgrave
0
43.73
11.9
13.6
10.5
11.5
11.78
12.833333
13.92
COVARIANCE
A statistical measure of the relationship between two vari- ables (e.g., financial ASSET prices), often used to determine the magnitude of CORRELATION. The covariance between two assets can be computed via:n − 1where xA,j is an observation of asset A, xA is the MEAN of asset A, xB,j is an obser- vation of asset B, xB is the mean of asset B, and n is the number of observations. See also CORRELATION COEFFICIENT, VARIANCE/COVARIANCE MATRIX.
palgrave
0
37.64
14.2
15
9.87
14.1
10.98
16.833333
15.87
COVER
(1) The act of repurchasing or HEDGING a position previously SOLD SHORT or held naked. (2) Any form of INSURANCE or REINSURANCE.
palgrave
0
49.15
11.9
0
9.34
12.5
11.19
16
17.89
COVERAGE TEST
A financial test that is performed in a COLLATERALIZED DEBT OBLIGATION to ensure that sufficient COLLATERAL and INTEREST COVERAGE exists. Successful passing of each coverage test allows CASH FLOW from the underlying reference POOL to flow to the TRANCHES with increasing levels of SUBORDINATION. See also INTEREST ,OVERCOLLATERALIZATION TEST, WATERFALL.
palgrave
0
20.68
14.5
16.3
17.11
15.5
11.41
13.666667
17.88
COVERED BOND
A BOND issued by FINANCIAL INSTITUTIONS that is collateralized by public sector LOANS or MORTGAGES. See also CEDULAS HIPOTECARIAS, HYPOTHEKENPFANDBRIEFE, IRISH ASSET COVERED SECURITIES, JUMBO PFANDBRIEFE, LETTRES DE GAGE, OBLIGATIONS FONCIERES, OFFENTLICHE PFANDBRIEFE.
palgrave
0
29.35
13.3
0
22.68
20.6
15.46
11.25
13.87
COVERED CALL
An OPTION position where the seller of a CALL OPTION owns the UNDERLYING ASSET deliverable if the buyer EXERCISES the option. Selling covered calls is a relatively low RISK way of generating PREMIUM income since the cost of the underlying is already known. See also COVERED OPTION, COVERED PUT, NAKED CALL.INTEREST ARBITRAGE.
palgrave
0
37
12.4
13.6
12.29
12.1
10.26
12
13.84