sohomghosh/FinRAD_Financial_Readability_Assessment_Dataset

terms stringlengths 1 156	definitions stringlengths 3 4.2k	source stringclasses 15 values	flesch_reading_ease float64 -301.79 121	flesch_kincaid_grade float64 -3.5 55.6	smog_index float64 0 26.5	coleman_liau_index float64 -33.81 51.4	automated_readability_index float64 -6.9 65	dale_chall_readability_score float64 0.1 35.3	linsear_write_formula float64 -0.5 73	gunning_fog float64 0.4 56
HIDDEN ORDER	A type of ORDER submitted to an EXCHANGE or ALTERNATIVE TRADING SYSTEM that remains completely obscured from public view. See also DARK POOL, RESERVE ORDER.	palgrave	50.33	9.3	0	11.76	9.7	9.94	6.75	9.8
HIDDEN RESERVES	RESERVES, generally held by a BANK or other FINANCIAL INSTITUTION, that are not readily detectable through an exam- ination of the BALANCE SHEET. Hidden reserves may be implicitly contained in an undervaluation of particular kinds of ASSETS, though such practice is often discouraged through ACCOUNTING rules as it fails to provide a fair esti- mate of financial condition.	palgrave	33.58	15.8	0	14.23	18.7	11.61	20	18.5
HIGH-LOW OPTION	An OVER-THE-COUNTER COMPLEX OPTION that grants the buyer a payoff based on the difference between the high and low prices achieved by the UNDERLYING during the life of the transaction. See also CALL ON THE MAXIMUM, PUT ON THE MINIMUM.	palgrave	59.64	9.9	0	10.27	11.6	9.37	13	12
HIGH STREET BANK	In the United Kingdom, a COMMERCIAL BANK that caters primarily to retail customers, accepting DEPOSITS and granting consumer, personal, and MORTGAGE LOANS. Although such banks also engage in other institutional banking business, their marketing and focus is weighted heavily toward individuals.	palgrave	25.29	14.8	0	17.64	18	13.13	14.25	16
HIGH WATER MARK	The maximum value that has been attained by a HEDGE FUND or other INVESTMENT FUND. Performance fees are often synchronized to the high water mark, so that if RETURNS fall short of a previously established high water mark in a given year, the manager receives no performance fee.	palgrave	55.58	11.5	0	10.45	13.2	9.1	16	14.6
HIGH-YIELD BOND	A BOND issued by a firm with a SUBINVESTMENT GRADE CREDIT RATING (i.e., below BBB– by Standard and Poor’s, below Baa3 by Moody’s Investors Services). The greater likelihood of DEFAULT compared with INVESTMENT GRADE bonds results in a greater COST OF CAPITAL for the ISSUER and a higher YIELD for INVESTORS. High-yield bonds were popu- larized during the corporate expansion and TAKEOVER phase of the mid- to late 1980s and have become an integral part of the CAPITAL MARKETS, par- ticularly in the United States and Europe. Also known as JUNK BOND. See alsoFALLEN ANGEL.	palgrave	60.65	9.5	11.2	10.79	11.7	10.89	11.5	10.97
HIRE PURCHASE	In the United Kingdom, INSTALLMENT CREDIT.OPTION METHOD, SIMULATION METHOD.	palgrave	20.04	12.7	0	21.54	18.1	12.86	6.5	12.49
HISTORICAL RATE ROLLOVER	A transaction in the FOREIGN EXCHANGE MARKET where a maturing FORWARD CONTRACT is extended for a subsequent period based on the originally contracted FORWARD RATE. This implies one of the two parties to the transaction is providing the other with a CREDIT line equal to the difference between the old forward rate and the new forward rate.	palgrave	42.55	14.4	0	11.61	16.2	8.93	19.25	17.01
HISTORICAL VOLATILITY	A retrospective statistical measure of the price movement of an ASSET based on historical data, often conveyed in terms of VARIANCE or STANDARD DEVIATION. Historical volatility is applied to various financial and RISK valuation techniques, including FRACTIONAL EXPOSURE and VALUE-AT-RISK. See also IMPLIED VOLATILITY.	palgrave	22.71	13.7	15	17.33	15.2	12.62	11.666667	15.88
HIT THE BID	Any instance where one BROKER or DEALER is willing to sell at the BID price posted by another broker or dealer. See also TAKE THE OFFER.	palgrave	75.2	6	0	6.13	5.2	6.71	6	5.2
HKSE	See HONG KONG STOCK EXCHANGE.	palgrave	100.24	0.5	0	6.12	4.6	10.2	1.5	2
HLT LOAN	See HIGHLY LEVERAGED TRANSACTION LOAN.	palgrave	49.48	7.6	0	16.56	13.1	13.36	2.5	10
HOLD HARMLESS AGREEMENT	An agreement by one party to assume the LIABILITY of a second party, holding it harmless or indemnifying against anypotential financial loss; such an agreement may exist implicitly or explicitly between PRINCIPAL and AGENT.	palgrave	11.59	20.1	0	15.21	21.9	11.36	24	21.84
HOLDING COMPANY	A form of corporate organization that holds the ownership interest in a PARENT and/or a series of SUBSIDIARIES. A hold- ing company may be constituted as a SHELL with no true operations and resources of its own (apart from ownership stakes in its subholdings) or it may be an operating company in its own right. See also BANK .	palgrave	51.89	10.8	14.1	8.94	10.1	8.41	13.5	13.24
HOLDING PERIOD	(1) The period of time that an INVESTMENT MANAGER holds an ASSET within a PORTFOLIO. (2) See LIQUIDATION PERIOD.	palgrave	35.27	13.1	0	9.57	11.4	12.06	15.5	16.02
HOMOGENOUS EXPOSURE	A group of RISKS that feature similar or identi- cal characteristics, leading to the same EXPECTED LOSS levels. Homogenous exposures allow for more accurate and equitable ACTUARIAL PRICING of INSURANCE CONTRACTS and ultimately reduce the likelihood of ADVERSE SELECTION.	palgrave	17.84	15.6	0	16.65	16.3	13.51	15.75	20.11
HORIZONTAL CLEARING SERVICES	CLEARING services that are offered by the CLEARINGHOUSE of one EXCHANGE to other exchanges and ELECTRONIC COMMUNICATIONS NETWORKS as a means of generating additional REVENUES.	palgrave	20.72	16.6	0	17.82	19.5	11.82	17.5	18
HORIZONTAL MERGER	A MERGER between companies from the same industrial sector, sometimes direct competitors. A horizontal merger is often arranged in order to build market share or obtain better product or client cover- age. Also known as HORIZONTAL INTEGRATION. See also CONGLOMERATE MERGER, VERTICAL MERGER.	palgrave	35.13	11	11.2	14.02	11.1	8.95	6.375	10.83
HORIZONTAL SPREAD	Any SPREAD where the OPTIONS being used have different EXPIRY DATES.	palgrave	68.77	6.4	0	11.58	8.9	8.49	5.5	4.4
HOST SECURITY	A SECURITY (typically a NOTE or BOND) to which a DERIVATIVE is attached (i.e., an OPTION or COMPLEX OPTION for a STRUCTURED NOTE, or a WARRANT for a BOND WITH WARRANT).	palgrave	48.47	14.2	0	7.44	15	10.27	18.5	16.27
HOSTILE TAKEOVER	An unsolicited ACQUISITION offer from a RAIDER or BLACK KNIGHT that the TARGET’s DIRECTORS and executives do not favor and which they attempt to thwart through ANTITAKEOVER DEFENSES, ANTITAKEOVER LAWS, or SCORCHED EARTH DEFENSES, or by seeking a friendly partner in the form of a WHITE KNIGHT or WHITE SQUIRE. Also known as CONTESTED TRANSACTION.	palgrave	43.56	14	0	13.29	17.3	9.88	18.75	16.82
HSI	See HANG SENG INDEX.STUCK DEAL.	palgrave	83.32	2.9	0	7.28	6.5	10.2	2.5	2
HURDLE RATE	See COST OF CAPITAL.	palgrave	75.88	3.7	0	0	0.6	0.2	2	1.6
HYBRID BOND	A FIXED INCOME SECURITY with EMBEDDED OPTIONS that alter RISK and RETURN characteristics. The general class of hybrids includes CALLABLE BONDS, PUTABLE BONDS, BONDS WITH WARRANTS, CONVERTIBLE BONDS, and STRUCTURED NOTES.PREFERRED STOCK and JUNIOR SUBORDINATED DEBENTURES. See alsoPERPETUAL PREFERRED STOCK.	palgrave	32.6	12	12.5	19.42	16.7	12.19	8.333333	11.32
HYBRID MODEL	A general corporate system that is characterized by ILLIQUID CAPITAL MARKETS, an inactive or nonexistent CORPORATE CONTROL MARKET, and nascent regulatory and legal frameworks; family interests often hold large ownership stakes in companies, related company conglomeration is common, and ownership ties between companies and BANKS can be signifi- cant. Emerging nations often use the hybrid model. See also MARKET MODEL, RELATIONSHIP MODEL.	palgrave	16.62	16.1	17.1	17.17	17.6	11.79	16.333333	15.38
HYPERINFLATION	A phenomenon of rapidly escalating prices for goods and services, leading to dramatic loss of purchasing power. Though metrics of hyper- inflation are subjective, the INTERNATIONAL ACCOUNTING STANDARDS BOARD defines it to be three or more consecutive years of INFLATION reach- ing or exceeding 100% per annum. See also INFLATION ACCOUNTING.	palgrave	37.3	12.3	15	14.5	13.9	11.29	12.833333	14.64
HYPOTHECATION	A process where a BORROWER pledges ASSETS as COLLATERAL for a LOAN. No transfer of TITLE occurs through hypotheca- tion, but the LENDER accepting hypothecated assets is granted the right to dis- pose of the assets if the borrower DEFAULTS. The same process applies when an INVESTOR pledges securities to a BROKER to secure a PURPOSE (or MARGIN) LOAN or SHORT SALE. See also RE.	palgrave	63.39	8.5	10.7	9.57	9.4	10.28	8.875	10.21
IAS	See INTERNATIONAL ACCOUNTING STANDARDS.	palgrave	-34.11	19	0	27.55	23	15.68	3	21.6
IASB	See INTERNATIONAL ACCOUNTING STANDARDS BOARD.	palgrave	-1.29	14.7	0	24.68	19.7	13.36	3.5	18
IBF	See INTERNATIONAL BANKING FACILITY.	palgrave	-51.03	21.4	0	21.75	18.3	15.68	3	21.6
IBNR	See INCURRED BUT NOT REPORTED.	palgrave	66.4	5.2	0	7.28	5.6	10.2	2.5	10
IBRD	See INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT.	palgrave	-3.32	15.5	0	22.34	17.1	10.75	5.5	19.94
ICAAP	See INTERNAL CAPITAL ADEQUACY ASSESSMENT PROCESS.	palgrave	-10.76	16.3	0	20.75	16.1	14.46	6	22.4
ICE	See INTERCONTINENTAL EXCHANGE.	palgrave	-50.02	21	0	26.63	24	9.05	1.5	14.53
ICEBERG	See RESERVE ORDER.	palgrave	59.97	5.6	0	3.43	5.2	9.05	0.5	1.2
IDB	See INTER-DEALER BROKER.	palgrave	9.21	12.7	0	13.12	14.6	19.58	1.5	1.2
IDIOSYNCRATIC RISK	See DIVERSIFIABLE RISK.	palgrave	9.21	12.7	0	13.12	13	14.31	1.5	14.53
IDLE BALANCE	Funds placed in a BANK by a DEPOSITOR that do not earn any INTEREST. Also known as TRANSACTION BALANCE.	palgrave	70.29	5.8	0	6.29	4.4	9.09	5.25	10.12
IDR	See INTERNATIONAL DEPOSITORY RECEIPT.	palgrave	-76.41	24.9	0	24.65	20.6	15.68	3	21.6
IFC	See INTERNATIONAL FINANCE CORPORATION.	palgrave	-51.03	21.4	0	26.1	21.8	15.68	3	21.6
IFRS	See INTERNATIONAL FINANCIAL REPORTING STANDARDS.	palgrave	-35.13	19.4	0	28.16	22.5	16.52	4.5	26
IJARA	A secured LEASE scheme used in ISLAMIC FINANCE, where a customer secures financing for a durable ASSET by leasing it from a BANK (which purchases the asset, and grants the customer the right to buy the asset at a defined value in the future).	palgrave	43.74	18.1	0	9.19	21.9	10.84	25	20.33
ILLIQUID	(1) At a corporate level, the state of possessing insufficient cash to meet obligations. (2) At a market level, the state of having insufficient transaction volume to permit TRADING. See also LIQUID, LIQUID ASSETS, LIQUIDITY, ITY.	palgrave	36.28	12.7	0	11.89	13.1	10.67	12.5	13.87
ILLIQUIDITY	(1) At a corporate level, lack of cash, NEAR MONEY, unsecured funding access, or unencumbered LIQUID ASSETS to meet expected or unex- pected payments. (2) The state of being ILLIQUID or lacking LIQUID ASSETS.(3)At a market level, lack of TRADING volume in a SECURITY or ASSET; an illiquid market is characterized by wide SPREADS, i.e., large differences between BIDS and OFFERS. See also ENDOGENOUS LIQUIDITY, EXOGENOUS LIQUIDITY, LIQUIDITY, LIQUIDITY RISK.	palgrave	19.03	19.3	0	13.47	22.2	12.37	24.5	19.71
ILS	See INSURANCE-LINKED SECURITY.	palgrave	-24.64	17.4	0	24.72	24	19.58	2.5	27.87
IMMEDIATE ANNUITY	An ANNUITY contract that begins to make pay- ments to the BENEFICIARY as soon as it is executed.	palgrave	53.21	10.3	0	7.25	8.2	9.79	12	13.87
IMMEDIATE OR CANCEL ORDER	An ORDER to purchase or sell SECURITIES where the BROKER is instructed to fill as much of the order as possible as soon as it is entered and cancel any portion that is not immedi- ately filled.	palgrave	42.38	16.5	0	7.61	17	9.74	22.5	18.04
IMPACT DAY	The first day of official (rather than GRAY MARKET) TRADING in a NEW ISSUE of SECURITIES.See GDP DEFLATOR.See IMPLIED REPO RATE.	palgrave	50.16	11.5	0	11.14	13.3	10.69	13.5	14.11
IMPLIED FORWARD RATE	The INTEREST RATE that can be earned for a defined period of time, starting at some future point. The implied forward rate is the rate necessary to make funds invested at a short rate and reinvested at aforward rate (i.e., multiple period) precisely equal to the return invested at a long rate (i.e., single period).The t-year implied forward rate starting in n periods (semiannual) is given by:(1 + rn )n⎣⎦where r is the prevailing semiannual SPOT RATE. Also known as FORWARD RATE. See also IMPLIED FORWARD CURVE, IMPLIED REPO RATE.	palgrave	48.84	12	13.8	10.39	13.2	9	14.75	13.41
IMPLIED REPO RATE	The RETURN before FINANCING costs implied by a CASH-AND-CARRY ARBITRAGE involving BONDS. The implied repo rate can be computed via:(1 + r )b⎢⎣(1 + r a,b )b−a ⎥⎦where r0,b is the SPOT RATE to time period b and ra,b is the FUTURES rate covering periods a and b. Also known as IMPLIED FINANCING RATE. See alsoIMPLIED FORWARD RATE.	palgrave	57.27	8.8	12.2	8.46	8.5	9.41	8.75	11.31
IMPLIED VOLATILITY	A prospective measure of the price movement of an ASSET imputed from the market prices of traded OPTIONS. VOLATILITY is one of the central inputs of option pricing models but is not directly observable in the market; accordingly, traders use observed option prices to derive volatility. See also HISTORICAL VOLATILITY.	palgrave	46.06	11	12.5	13.05	12.2	10.78	11	11.48
IMPLIED YIELD	The YIELD on a SECURITY that is computed based on pre- vailing INTEREST RATES, as reflected in the current YIELD CURVE.	palgrave	58.62	10.3	0	9.23	11.3	12.2	14.5	16.02
IMPORT DUTY	A TAX or TARIFF applied to goods that are being IMPORTED into a country, generally as a way of controlling the inflow of foreign goods and to generate additional tax-based REVENUES. An import duty may be lev- ied via a fixed charge or on an AD VALOREM basis.	palgrave	55.58	11.5	0	7.9	11.3	11.08	14.5	13.77
IMPORTS	Goods and services produced offshore, transported or brought into the country, and sold to residents of the nonproducing nation, including VISIBLES (goods) and INVISIBLES (services). See also BALANCE OF TRADE, EXPORTS.	palgrave	38.82	11.7	0	15.72	14.9	10.52	10.75	13.94
IMPREST ACCOUNT	(1) An account established by a company as a SELF- INSURANCE mechanism to cover low-severity property losses. (2) A petty cash account that allows an individual to charge for small expenses.	palgrave	23.09	17.7	0	11.73	18.4	11.29	23.5	21.43
IN-ARREARS SWAP	See ARREARS SWAP.	palgrave	93.81	0.9	0	1.52	3.6	14.31	0.5	1.2
IN PLAY	The state of a company that is the subject of a TAKEOVER or which has put itself up for sale.	palgrave	85.02	6.4	0	3.89	6	1.78	11	8
IN-THE-MONEY	A condition where the price of an UNDERLYING reference ASSET is higher than the STRIKE PRICE for a CALL OPTION or below the strike for a PUT OPTION, meaning the contract has immediate INTRINSIC VALUE if exercised. See also AT-THE-MONEY, MONEYNESS, OUT-OF-THE-MONEY.	palgrave	41.7	12.7	0	12.3	14.2	9.57	14.5	15.07
INC	See ORPORATED.	palgrave	-6.7	14.7	0	4.2	10.2	11.63	1	20.8
INCHOATE BILL OF EXCHANGE	A BILL OF EXCHANGE where one or more of the material terms are omitted, and which can be completed at the dis- cretion of the possessor within a reasonable time frame. See also INCHOATE CONTRACT.	palgrave	62.17	8.9	0	8.47	9	9.47	10.75	11.57
INCHOATE CONTRACT	A CONTRACT that has not been executed by all required parties, and which is therefore not considered enforceable. See alsoINCHOATE BILL OF EXCHANGE.	palgrave	59.8	7.8	0	12.57	10.1	9.7	6.75	11.56
INCOME	A REVENUE stream that arises from INVESTMENT, sales, or labor, and which may be subject to some form of TAX.	palgrave	76.56	7.6	0	7.37	9.5	8.58	11	10
INCOME DISTRIBUTION	The allocation of national income across specific groups or classes, often computed for comparative purposes. The allocation can be measured via statistical measures, such as the GINI COEFFICIENT.	palgrave	23.43	13.5	0	16.29	14	12.23	11.5	17.03
INCOME FUND	A MUTUAL FUND or UNIT INVESTMENT TRUST that invests CAPITAL primarily or exclusively in INCOME STOCKS.	palgrave	29.86	13.1	0	13.63	12.2	12.33	13	16.4
INCOME STATEMENT	A key FINANCIAL STATEMENT that reflects a com- pany’s REVENUES and EXPENSES throughout the fiscal accounting period; the results it presents thus contain the cumulative effect of the reporting period. Presentation of the income statement can vary by country, accounting regime and/or industry sector. The summarized income statement takes the following general form:Also known as PROFIT AND LOSS ACCOUNT.	palgrave	34.56	13.3	15.5	15.95	16	11.57	14.5	13.98
INCOME STOCK	The STOCK of a company that is expected to produce gradual, if stable, profits over the medium term, providing INVESTORS with DIVIDENDS rather than significant CAPITAL GAINS. An income stock may fea- ture lower VOLATILITY and BETA than a GROWTH STOCK. See also INCOME FUND.	palgrave	56.25	9.1	12.5	10.72	10	10.35	10.166667	11.33
INCOME TAX	A TAX levied on INCOME by a government authority to fund the provision of government services and to enforce some degree of INCOME DISTRIBUTION. Income tax may be levied at a personal level (including indi- viduals, households, SOLE PROPRIETORSHIPS, PARTNERSHIPS) and at a cor- porate level. Income tax is often designed as a PROGRESSIVE TAX.	palgrave	44.44	11.6	14.1	12.01	12.4	10	12.833333	13.87
INCOME WARRANT	A WARRANT that is structured to pay the holder INTEREST prior to being EXERCISED.	palgrave	57.27	8.8	0	9.91	8.5	9.97	8	11.31
INCONVERTIBLE CURRENCY	See NONCONVERTIBLE CURRENCY.	palgrave	-24.64	17.4	0	22.75	20.9	14.31	2.5	27.87
INCORPORATED (INC)	In the United States, a CORPORATION that is pub- licly traded.	palgrave	68.77	6.4	0	7.35	6.3	9.92	5.5	8.04
INCORPOREAL INTEREST	The right to an INSURABLE INTEREST in a des- ignated ASSET, conveyed when the assets are pledged as COLLATERAL.	palgrave	52.19	10.7	0	10.21	11.1	12.06	13.5	16.02
INCURRED LOSS	In INSURANCE, a loss that has already occurred, whether or not the INSURER has paid a SETTLEMENT to the INSURED. See alsoINCURRED LOSS RATIO.	palgrave	67.76	6.8	0	9.38	7.7	8.84	7	9.8
INCURRED LOSS RATIO	A measure of how much of an INSURER’s PREMIUM is used to cover losses, computed as:where Lossinc is the sum of INCURRED LOSSES and Pr is premium earned. The larger the ratio, the greater the amount of premium that is used to coverlosses.	palgrave	58.11	10.5	0	8.36	10.7	9.11	13.75	12.32
INDEMNIFICATION	The process of guaranteeing payment or recompense should a party suffer a specified loss.	palgrave	48.81	9.9	0	13.22	11.1	8.84	9	14.17
INDEMNITY COMPANY	An INSURER that specializes in UNDERWRITING a range of PROPERTY AND CASUALTY INSURANCE covers.	palgrave	14.97	14.7	0	15.25	12.8	13.35	13	22.74
INDEMNITY CONTRACT	An INSURANCE CONTRACT that provides the INSURED with restitution for actual losses sustained. The indemnity contract, which includes PROPERTY AND CASUALTY INSURANCE and LIABILITY INSURANCE, is designed to return the insured to the financial state it occu- pied prior to the loss. See also INDEMNITY, VALUED CONTRACT.	palgrave	30.16	13	14.1	14.9	13.4	10.8	11.5	13.09
INDEMNITY TRIGGER	A conditional event in an INSURANCE-LINKED SECURITY that causes suspension of INTEREST and/or PRINCIPAL when actual losses sustained by the ISSUER reach a predefined amount. See also INDEX TRIGGER, PARAMETRIC TRIGGER.	palgrave	30.36	12.9	0	16.47	14.7	13.06	12.25	17.81
INDENTURE	(1) The written terms and conditions of a BOND or NOTE issue, which generally includes details regarding form of SECURITY, INTEREST,CALL/PUT provisions, COVENANTS, EVENTS OF DEFAULT, and PRINCIPAL repayment. The indenture also defines the rights, privileges, and OBLIGATIONS of the ISSUER, INVESTOR, and TRUSTEE related to the initial provision of CAPITAL and the timely payment of interest and repayment of principal. (2) A DEED that relates to the transfer of a landed estate.INDEPENDENT FINANCIAL ADVISOR.	palgrave	16.49	20.3	0	15.39	24.6	13.29	28.75	23.53
INDEX (	1) A statistical measure that combines disparate data into a single reference, which becomes a BENCHMARK for some base year of computation. An index can be computed in various forms, either without a weighting (i.e., a pure price index equal to the price in the current period divided by the price in the base period), or with a weighting (i.e., as in the CURRENT WEIGHTED INDEX and the BASE WEIGHTED INDEX). (2) A basket of ASSETS that are com- bined into a single, often tradable, representation. (1) See also INDEXATION.PROGRAM TRADING.	palgrave	25.29	21	0	10.58	24.5	10.75	27.75	22.16
INDEX FUND	A MUTUAL FUND that GUARANTEES INVESTORS returns based on a defined market INDEX or subindex. Index funds generally fea- ture lower costs than actively managed funds and are favored by investors who do not believe that a market index can be exceeded over the long term. Also known as TRACKER FUND. See also INDEXING, PASSIVE INVESTMENT STRATEGY.	palgrave	56.96	8.9	11.2	10.84	9.5	10.99	8.125	11.33
INDEX FUTURE	A FUTURES CONTRACT, bought or sold via an EXCHANGE, which references a specific BENCHMARK EQUITY INDEX, index sector, or equity BASKET. See also COMMODITY FUTURE, CURRENCY FUTURE, INTEREST RATE FUTURE.	palgrave	30.87	12.7	0	13.85	13.1	11.22	11	14
INDEX-LINKED ANNUITY	An ANNUITY with payments to the BENEFICIARY that are linked to a specified INDEX.	palgrave	48.81	9.9	0	9.91	8.5	11.1	9	14.17
INDEX OPTION	An EXCHANGE-TRADED or OVER-THE-COUNTER OPTION involving a broad STOCK INDEX. VANILLA and COMPLEX OPTIONS can be bought and sold on a broad range of indexes, and are typically con- tracted for CASH SETTLEMENT. See also COMMODITY OPTION, CURRENCY OPTION, EQUITY OPTION, INTEREST RATE OPTION.	palgrave	39.63	11.4	13.6	13.1	12.2	10.11	10.666667	12.24
INDEX REBALANCING	A periodic process where constituents of a traded or tradable INDEX are added or removed, to ensure that the index remains con- sistent with its definition of eligible constituents. Constituents may change as a result of MERGERS or ACQUISITIONS, increase or decrease in MARKET CAPITALIZATION beyond certain levels, and so forth. INVESTORS that BENCHMARK their PORTFOLIOS to particular indexes must go through simi- lar readjustment exercises in order to minimize TRACKING ERROR.	palgrave	30.2	15	14.1	15.15	17.2	12.28	15.666667	15.71
INDEX TRANCHE	A form of SINGLE TRANCHE COLLATERALIZED DEBT OBLIGATION that is based on standard quoted CREDIT DEFAULT SWAP INDEXES, including those related to ITRAXX INDEXES.	palgrave	30.2	15	0	15.67	17.5	14.04	18	17.93
INDEX TRIGGER	A conditional event in an INSURANCE-LINKED SECURITY that causes suspension of INTEREST and/or PRINCIPAL when the value of a recognized third-party index used to track RISK exposure or loss experience reaches a certain threshold. See also INDEMNITY TRIGGER, PARAMETRIC TRIGGER.	palgrave	17.34	15.8	0	16.24	16.5	12.13	16	19
INDEXATION	The process of linking a particular economic or financial action to a base reference INDEX. Indexation may be used to link payments and receipts to an INFLATION index in order to adjust for rising prices of goods and services.	palgrave	51.68	10.9	0	10.39	11	11.08	12.75	13.95
INDEXING	A PASSIVE INVESTMENT STRATEGY based on replicating the performance of a specific INDEX with a minimum of TRACKING ERROR. See also ACTIVE INVESTMENT STRATEGY, INDEX FUND.	palgrave	32.9	11.9	0	13.27	11.2	12.18	10.5	14.43
INDICATED MARKET	An estimated TRADING range for a SECURITY that has been halted on an EXCHANGE as a result of pending news or an ORDER IMBALANCE. The indicated market is a gauge of where the security may trade once it reopens, although SUPPLY and DEMAND forces ultimately determine the actual starting level.	palgrave	37.64	14.2	0	10.74	13.9	10.88	16.5	15.6
INDICATION OF INTEREST (IOI)	Preliminary indication by an INVESTOR of possible interest in purchasing a NEW ISSUE of SECURITIES. Since IOIs aregathered informally while securities are still in the REGISTRATION process, the interest is considered nonbinding; IOIs cannot be regarded as solicitation (by the UNDERWRITER) or commitment (by the investor). IOIs are an essential part of the BOOK-BUILDING process and provide UNDERWRITERS with valu- able input on pricing and demand. Also known as CIRCLE.	palgrave	28.33	13.7	15.9	14.67	14.3	10.14	13.75	16.14
INDICATIVE PRICE	See INDICATIVE QUOTE.	palgrave	59.97	5.6	0	9.23	9.9	14.31	1.5	14.53
INDICATIVE QUOTE	A BID and/or OFFER supplied by a DEALER or MARKET MAKER to a BROKER or client that cannot be regarded as certain, but as a guide or estimate for informational purposes. Only when EXECUTION appears more likely to occur will the dealer provide an actionable FIRM QUOTE. Also known as INDICATIVE PRICE. See also QUOTED SPREAD.	palgrave	57.27	8.8	10.7	9.27	8.1	9.41	7.75	10.6
INDICATORS	See ECONOMIC .	palgrave	-6.7	14.7	0	1.3	7.8	11.63	1.5	20.8
INDIRECT LOSS	See CONSEQUENTIAL LOSS.	palgrave	34.59	9.2	0	13.12	13	9.05	1.5	14.53
INDIRECT SHAREHOLDER	See NOMINEE SHAREHOLDER.	palgrave	9.21	12.7	0	15.03	14.6	14.31	2.5	27.87
INDIRECT STAKEHOLDERS	In GOVERNANCE, the parties impacted by a company’s activities and actions in a less obvious, immediate, or direct manner than DIRECT STAKEHOLDERS; this group generally includes REGULATORS, taxpayers, and competitors.	palgrave	-1.28	20.9	0	18.11	22.9	13.02	26	26.67
INDUSTRIAL PAPER	COMMERCIAL PAPER issued by a nonfinancial com- pany. See also FINANCIAL PAPER.	palgrave	31.55	10.4	0	10.08	7.9	11.83	3.5	12.4
INDUSTRIAL REVENUE BOND	In the United States, a form of MUNICIPAL BOND issued by a state or local government on behalf of a CORPORATION that is engaged in a development project on behalf of the municipality. Thebond may be backed by real ASSETS, such as property or buildings. Also known as INDUSTRIAL DEVELOPMENT BOND.	palgrave	45.76	11.1	12.5	9.74	9.7	9.43	11.166667	11.51
INELIGIBLE BILL	A BILL OF EXCHANGE that cannot be DISCOUNTED by another BANK or CENTRAL BANK.	palgrave	65.73	7.6	0	8.23	7.1	6.59	8	8.46
INFLATION	The rate of increase in prices of goods and services. Inflation can be measured at the wholesale level through indexes such as the PRODUCER PRICE INDEX, or at the retail level through the CONSUMER PRICE INDEX, RETAIL PRICE INDEX, or HARMONIZED INDEX OF CONSUMER PRICES. See also COST , DEFLATION, DEMAND , NOMINAL INTEREST RATE, REAL INTEREST RATE.	palgrave	52.49	10.6	12.5	11.84	12.4	9.08	12.333333	12.48

HIDDEN ORDER

A type of ORDER submitted to an EXCHANGE or ALTERNATIVE TRADING SYSTEM that remains completely obscured from public view. See also DARK POOL, RESERVE ORDER.

palgrave

0

50.33

9.3

0

11.76

9.7

9.94

6.75

9.8

HIDDEN RESERVES

RESERVES, generally held by a BANK or other FINANCIAL INSTITUTION, that are not readily detectable through an exam- ination of the BALANCE SHEET. Hidden reserves may be implicitly contained in an undervaluation of particular kinds of ASSETS, though such practice is often discouraged through ACCOUNTING rules as it fails to provide a fair esti- mate of financial condition.

palgrave

0

33.58

15.8

0

14.23

18.7

11.61

20

18.5

HIGH-LOW OPTION

An OVER-THE-COUNTER COMPLEX OPTION that grants the buyer a payoff based on the difference between the high and low prices achieved by the UNDERLYING during the life of the transaction. See also CALL ON THE MAXIMUM, PUT ON THE MINIMUM.

palgrave

0

59.64

9.9

0

10.27

11.6

9.37

13

12

HIGH STREET BANK

In the United Kingdom, a COMMERCIAL BANK that caters primarily to retail customers, accepting DEPOSITS and granting consumer, personal, and MORTGAGE LOANS. Although such banks also engage in other institutional banking business, their marketing and focus is weighted heavily toward individuals.

palgrave

0

25.29

14.8

0

17.64

18

13.13

14.25

16

HIGH WATER MARK

The maximum value that has been attained by a HEDGE FUND or other INVESTMENT FUND. Performance fees are often synchronized to the high water mark, so that if RETURNS fall short of a previously established high water mark in a given year, the manager receives no performance fee.

palgrave

0

55.58

11.5

0

10.45

13.2

9.1

16

14.6

HIGH-YIELD BOND

A BOND issued by a firm with a SUBINVESTMENT GRADE CREDIT RATING (i.e., below BBB– by Standard and Poor’s, below Baa3 by Moody’s Investors Services). The greater likelihood of DEFAULT compared with INVESTMENT GRADE bonds results in a greater COST OF CAPITAL for the ISSUER and a higher YIELD for INVESTORS. High-yield bonds were popu- larized during the corporate expansion and TAKEOVER phase of the mid- to late 1980s and have become an integral part of the CAPITAL MARKETS, par- ticularly in the United States and Europe. Also known as JUNK BOND. See alsoFALLEN ANGEL.

palgrave

0

60.65

9.5

11.2

10.79

11.7

10.89

11.5

10.97

HIRE PURCHASE

In the United Kingdom, INSTALLMENT CREDIT.OPTION METHOD, SIMULATION METHOD.

palgrave

0

20.04

12.7

0

21.54

18.1

12.86

6.5

12.49

HISTORICAL RATE ROLLOVER

A transaction in the FOREIGN EXCHANGE MARKET where a maturing FORWARD CONTRACT is extended for a subsequent period based on the originally contracted FORWARD RATE. This implies one of the two parties to the transaction is providing the other with a CREDIT line equal to the difference between the old forward rate and the new forward rate.

palgrave

0

42.55

14.4

0

11.61

16.2

8.93

19.25

17.01

HISTORICAL VOLATILITY

A retrospective statistical measure of the price movement of an ASSET based on historical data, often conveyed in terms of VARIANCE or STANDARD DEVIATION. Historical volatility is applied to various financial and RISK valuation techniques, including FRACTIONAL EXPOSURE and VALUE-AT-RISK. See also IMPLIED VOLATILITY.

palgrave

0

22.71

13.7

15

17.33

15.2

12.62

11.666667

15.88

HIT THE BID

Any instance where one BROKER or DEALER is willing to sell at the BID price posted by another broker or dealer. See also TAKE THE OFFER.

palgrave

0

75.2

6

0

6.13

5.2

6.71

6

5.2

HKSE

See HONG KONG STOCK EXCHANGE.

palgrave

0

100.24

0.5

0

6.12

4.6

10.2

1.5

2

HLT LOAN

See HIGHLY LEVERAGED TRANSACTION LOAN.

palgrave

0

49.48

7.6

0

16.56

13.1

13.36

2.5

10

HOLD HARMLESS AGREEMENT

An agreement by one party to assume the LIABILITY of a second party, holding it harmless or indemnifying against anypotential financial loss; such an agreement may exist implicitly or explicitly between PRINCIPAL and AGENT.

palgrave

0

11.59

20.1

0

15.21

21.9

11.36

24

21.84

HOLDING COMPANY

A form of corporate organization that holds the ownership interest in a PARENT and/or a series of SUBSIDIARIES. A hold- ing company may be constituted as a SHELL with no true operations and resources of its own (apart from ownership stakes in its subholdings) or it may be an operating company in its own right. See also BANK .

palgrave

0

51.89

10.8

14.1

8.94

10.1

8.41

13.5

13.24

HOLDING PERIOD

(1) The period of time that an INVESTMENT MANAGER holds an ASSET within a PORTFOLIO. (2) See LIQUIDATION PERIOD.

palgrave

0

35.27

13.1

0

9.57

11.4

12.06

15.5

16.02

HOMOGENOUS EXPOSURE

A group of RISKS that feature similar or identi- cal characteristics, leading to the same EXPECTED LOSS levels. Homogenous exposures allow for more accurate and equitable ACTUARIAL PRICING of INSURANCE CONTRACTS and ultimately reduce the likelihood of ADVERSE SELECTION.

palgrave

0

17.84

15.6

0

16.65

16.3

13.51

15.75

20.11

HORIZONTAL CLEARING SERVICES

CLEARING services that are offered by the CLEARINGHOUSE of one EXCHANGE to other exchanges and ELECTRONIC COMMUNICATIONS NETWORKS as a means of generating additional REVENUES.

palgrave

0

20.72

16.6

0

17.82

19.5

11.82

17.5

18

HORIZONTAL MERGER

A MERGER between companies from the same industrial sector, sometimes direct competitors. A horizontal merger is often arranged in order to build market share or obtain better product or client cover- age. Also known as HORIZONTAL INTEGRATION. See also CONGLOMERATE MERGER, VERTICAL MERGER.

palgrave

0

35.13

11

11.2

14.02

11.1

8.95

6.375

10.83

HORIZONTAL SPREAD

Any SPREAD where the OPTIONS being used have different EXPIRY DATES.

palgrave

0

68.77

6.4

0

11.58

8.9

8.49

5.5

4.4

HOST SECURITY

A SECURITY (typically a NOTE or BOND) to which a DERIVATIVE is attached (i.e., an OPTION or COMPLEX OPTION for a STRUCTURED NOTE, or a WARRANT for a BOND WITH WARRANT).

palgrave

0

48.47

14.2

0

7.44

15

10.27

18.5

16.27

HOSTILE TAKEOVER

An unsolicited ACQUISITION offer from a RAIDER or BLACK KNIGHT that the TARGET’s DIRECTORS and executives do not favor and which they attempt to thwart through ANTITAKEOVER DEFENSES, ANTITAKEOVER LAWS, or SCORCHED EARTH DEFENSES, or by seeking a friendly partner in the form of a WHITE KNIGHT or WHITE SQUIRE. Also known as CONTESTED TRANSACTION.

palgrave

0

43.56

14

0

13.29

17.3

9.88

18.75

16.82

HSI

See HANG SENG INDEX.STUCK DEAL.

palgrave

0

83.32

2.9

0

7.28

6.5

10.2

2.5

2

HURDLE RATE

See COST OF CAPITAL.

palgrave

0

75.88

3.7

0

0.6

0.2

2

1.6

HYBRID BOND

A FIXED INCOME SECURITY with EMBEDDED OPTIONS that alter RISK and RETURN characteristics. The general class of hybrids includes CALLABLE BONDS, PUTABLE BONDS, BONDS WITH WARRANTS, CONVERTIBLE BONDS, and STRUCTURED NOTES.PREFERRED STOCK and JUNIOR SUBORDINATED DEBENTURES. See alsoPERPETUAL PREFERRED STOCK.

palgrave

0

32.6

12

12.5

19.42

16.7

12.19

8.333333

11.32

HYBRID MODEL

A general corporate system that is characterized by ILLIQUID CAPITAL MARKETS, an inactive or nonexistent CORPORATE CONTROL MARKET, and nascent regulatory and legal frameworks; family interests often hold large ownership stakes in companies, related company conglomeration is common, and ownership ties between companies and BANKS can be signifi- cant. Emerging nations often use the hybrid model. See also MARKET MODEL, RELATIONSHIP MODEL.

palgrave

0

16.62

16.1

17.1

17.17

17.6

11.79

16.333333

15.38

HYPERINFLATION

A phenomenon of rapidly escalating prices for goods and services, leading to dramatic loss of purchasing power. Though metrics of hyper- inflation are subjective, the INTERNATIONAL ACCOUNTING STANDARDS BOARD defines it to be three or more consecutive years of INFLATION reach- ing or exceeding 100% per annum. See also INFLATION ACCOUNTING.

palgrave

0

37.3

12.3

15

14.5

13.9

11.29

12.833333

14.64

HYPOTHECATION

A process where a BORROWER pledges ASSETS as COLLATERAL for a LOAN. No transfer of TITLE occurs through hypotheca- tion, but the LENDER accepting hypothecated assets is granted the right to dis- pose of the assets if the borrower DEFAULTS. The same process applies when an INVESTOR pledges securities to a BROKER to secure a PURPOSE (or MARGIN) LOAN or SHORT SALE. See also RE.

palgrave

0

63.39

8.5

10.7

9.57

9.4

10.28

8.875

10.21

IAS

See INTERNATIONAL ACCOUNTING STANDARDS.

palgrave

0

-34.11

19

0

27.55

23

15.68

3

21.6

IASB

See INTERNATIONAL ACCOUNTING STANDARDS BOARD.

palgrave

0

-1.29

14.7

0

24.68

19.7

13.36

3.5

18

IBF

See INTERNATIONAL BANKING FACILITY.

palgrave

0

-51.03

21.4

0

21.75

18.3

15.68

3

21.6

IBNR

See INCURRED BUT NOT REPORTED.

palgrave

0

66.4

5.2

0

7.28

5.6

10.2

2.5

10

IBRD

See INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT.

palgrave

0

-3.32

15.5

0

22.34

17.1

10.75

5.5

19.94

ICAAP

See INTERNAL CAPITAL ADEQUACY ASSESSMENT PROCESS.

palgrave

0

-10.76

16.3

0

20.75

16.1

14.46

6

22.4

ICE

See INTERCONTINENTAL EXCHANGE.

palgrave

0

-50.02

21

0

26.63

24

9.05

1.5

14.53

ICEBERG

See RESERVE ORDER.

palgrave

0

59.97

5.6

0

3.43

5.2

9.05

0.5

1.2

IDB

See INTER-DEALER BROKER.

palgrave

0

9.21

12.7

0

13.12

14.6

19.58

1.5

1.2

IDIOSYNCRATIC RISK

See DIVERSIFIABLE RISK.

palgrave

0

9.21

12.7

0

13.12

13

14.31

1.5

14.53

IDLE BALANCE

Funds placed in a BANK by a DEPOSITOR that do not earn any INTEREST. Also known as TRANSACTION BALANCE.

palgrave

0

70.29

5.8

0

6.29

4.4

9.09

5.25

10.12

IDR

See INTERNATIONAL DEPOSITORY RECEIPT.

palgrave

0

-76.41

24.9

0

24.65

20.6

15.68

3

21.6

IFC

See INTERNATIONAL FINANCE CORPORATION.

palgrave

0

-51.03

21.4

0

26.1

21.8

15.68

3

21.6

IFRS

See INTERNATIONAL FINANCIAL REPORTING STANDARDS.

palgrave

0

-35.13

19.4

0

28.16

22.5

16.52

4.5

26

IJARA

A secured LEASE scheme used in ISLAMIC FINANCE, where a customer secures financing for a durable ASSET by leasing it from a BANK (which purchases the asset, and grants the customer the right to buy the asset at a defined value in the future).

palgrave

0

43.74

18.1

0

9.19

21.9

10.84

25

20.33

ILLIQUID

(1) At a corporate level, the state of possessing insufficient cash to meet obligations. (2) At a market level, the state of having insufficient transaction volume to permit TRADING. See also LIQUID, LIQUID ASSETS, LIQUIDITY, ITY.

palgrave

0

36.28

12.7

0

11.89

13.1

10.67

12.5

13.87

ILLIQUIDITY

(1) At a corporate level, lack of cash, NEAR MONEY, unsecured funding access, or unencumbered LIQUID ASSETS to meet expected or unex- pected payments. (2) The state of being ILLIQUID or lacking LIQUID ASSETS.(3)At a market level, lack of TRADING volume in a SECURITY or ASSET; an illiquid market is characterized by wide SPREADS, i.e., large differences between BIDS and OFFERS. See also ENDOGENOUS LIQUIDITY, EXOGENOUS LIQUIDITY, LIQUIDITY, LIQUIDITY RISK.

palgrave

0

19.03

19.3

0

13.47

22.2

12.37

24.5

19.71

ILS

See INSURANCE-LINKED SECURITY.

palgrave

0

-24.64

17.4

0

24.72

24

19.58

2.5

27.87

IMMEDIATE ANNUITY

An ANNUITY contract that begins to make pay- ments to the BENEFICIARY as soon as it is executed.

palgrave

0

53.21

10.3

0

7.25

8.2

9.79

12

13.87

IMMEDIATE OR CANCEL ORDER

An ORDER to purchase or sell SECURITIES where the BROKER is instructed to fill as much of the order as possible as soon as it is entered and cancel any portion that is not immedi- ately filled.

palgrave

0

42.38

16.5

0

7.61

17

9.74

22.5

18.04

IMPACT DAY

The first day of official (rather than GRAY MARKET) TRADING in a NEW ISSUE of SECURITIES.See GDP DEFLATOR.See IMPLIED REPO RATE.

palgrave

0

50.16

11.5

0

11.14

13.3

10.69

13.5

14.11

IMPLIED FORWARD RATE

The INTEREST RATE that can be earned for a defined period of time, starting at some future point. The implied forward rate is the rate necessary to make funds invested at a short rate and reinvested at aforward rate (i.e., multiple period) precisely equal to the return invested at a long rate (i.e., single period).The t-year implied forward rate starting in n periods (semiannual) is given by:(1 + rn )n⎣⎦where r is the prevailing semiannual SPOT RATE. Also known as FORWARD RATE. See also IMPLIED FORWARD CURVE, IMPLIED REPO RATE.

palgrave

0

48.84

12

13.8

10.39

13.2

9

14.75

13.41

IMPLIED REPO RATE

The RETURN before FINANCING costs implied by a CASH-AND-CARRY ARBITRAGE involving BONDS. The implied repo rate can be computed via:(1 + r )b⎢⎣(1 + r *a,b )b−a ⎥⎦where r0,b is the SPOT RATE to time period b and r*a,b is the FUTURES rate covering periods a and b. Also known as IMPLIED FINANCING RATE. See alsoIMPLIED FORWARD RATE.

palgrave

0

57.27

8.8

12.2

8.46

8.5

9.41

8.75

11.31

IMPLIED VOLATILITY

A prospective measure of the price movement of an ASSET imputed from the market prices of traded OPTIONS. VOLATILITY is one of the central inputs of option pricing models but is not directly observable in the market; accordingly, traders use observed option prices to derive volatility. See also HISTORICAL VOLATILITY.

palgrave

0

46.06

11

12.5

13.05

12.2

10.78

11

11.48

IMPLIED YIELD

The YIELD on a SECURITY that is computed based on pre- vailing INTEREST RATES, as reflected in the current YIELD CURVE.

palgrave

0

58.62

10.3

0

9.23

11.3

12.2

14.5

16.02

IMPORT DUTY

A TAX or TARIFF applied to goods that are being IMPORTED into a country, generally as a way of controlling the inflow of foreign goods and to generate additional tax-based REVENUES. An import duty may be lev- ied via a fixed charge or on an AD VALOREM basis.

palgrave

0

55.58

11.5

0

7.9

11.3

11.08

14.5

13.77

IMPORTS

Goods and services produced offshore, transported or brought into the country, and sold to residents of the nonproducing nation, including VISIBLES (goods) and INVISIBLES (services). See also BALANCE OF TRADE, EXPORTS.

palgrave

0

38.82

11.7

0

15.72

14.9

10.52

10.75

13.94

IMPREST ACCOUNT

(1) An account established by a company as a SELF- INSURANCE mechanism to cover low-severity property losses. (2) A petty cash account that allows an individual to charge for small expenses.

palgrave

0

23.09

17.7

0

11.73

18.4

11.29

23.5

21.43

IN-ARREARS SWAP

See ARREARS SWAP.

palgrave

0

93.81

0.9

0

1.52

3.6

14.31

0.5

1.2

IN PLAY

The state of a company that is the subject of a TAKEOVER or which has put itself up for sale.

palgrave

0

85.02

6.4

0

3.89

6

1.78

11

8

IN-THE-MONEY

A condition where the price of an UNDERLYING reference ASSET is higher than the STRIKE PRICE for a CALL OPTION or below the strike for a PUT OPTION, meaning the contract has immediate INTRINSIC VALUE if exercised. See also AT-THE-MONEY, MONEYNESS, OUT-OF-THE-MONEY.

palgrave

0

41.7

12.7

0

12.3

14.2

9.57

14.5

15.07

INC

See ORPORATED.

palgrave

0

-6.7

14.7

0

4.2

10.2

11.63

1

20.8

INCHOATE BILL OF EXCHANGE

A BILL OF EXCHANGE where one or more of the material terms are omitted, and which can be completed at the dis- cretion of the possessor within a reasonable time frame. See also INCHOATE CONTRACT.

palgrave

0

62.17

8.9

0

8.47

9

9.47

10.75

11.57

INCHOATE CONTRACT

A CONTRACT that has not been executed by all required parties, and which is therefore not considered enforceable. See alsoINCHOATE BILL OF EXCHANGE.

palgrave

0

59.8

7.8

0

12.57

10.1

9.7

6.75

11.56

INCOME

A REVENUE stream that arises from INVESTMENT, sales, or labor, and which may be subject to some form of TAX.

palgrave

0

76.56

7.6

0

7.37

9.5

8.58

11

10

INCOME DISTRIBUTION

The allocation of national income across specific groups or classes, often computed for comparative purposes. The allocation can be measured via statistical measures, such as the GINI COEFFICIENT.

palgrave

0

23.43

13.5

0

16.29

14

12.23

11.5

17.03

INCOME FUND

A MUTUAL FUND or UNIT INVESTMENT TRUST that invests CAPITAL primarily or exclusively in INCOME STOCKS.

palgrave

0

29.86

13.1

0

13.63

12.2

12.33

13

16.4

INCOME STATEMENT

A key FINANCIAL STATEMENT that reflects a com- pany’s REVENUES and EXPENSES throughout the fiscal accounting period; the results it presents thus contain the cumulative effect of the reporting period. Presentation of the income statement can vary by country, accounting regime and/or industry sector. The summarized income statement takes the following general form:Also known as PROFIT AND LOSS ACCOUNT.

palgrave

0

34.56

13.3

15.5

15.95

16

11.57

14.5

13.98

INCOME STOCK

The STOCK of a company that is expected to produce gradual, if stable, profits over the medium term, providing INVESTORS with DIVIDENDS rather than significant CAPITAL GAINS. An income stock may fea- ture lower VOLATILITY and BETA than a GROWTH STOCK. See also INCOME FUND.

palgrave

0

56.25

9.1

12.5

10.72

10

10.35

10.166667

11.33

INCOME TAX

A TAX levied on INCOME by a government authority to fund the provision of government services and to enforce some degree of INCOME DISTRIBUTION. Income tax may be levied at a personal level (including indi- viduals, households, SOLE PROPRIETORSHIPS, PARTNERSHIPS) and at a cor- porate level. Income tax is often designed as a PROGRESSIVE TAX.

palgrave

0

44.44

11.6

14.1

12.01

12.4

10

12.833333

13.87

INCOME WARRANT

A WARRANT that is structured to pay the holder INTEREST prior to being EXERCISED.

palgrave

0

57.27

8.8

0

9.91

8.5

9.97

8

11.31

INCONVERTIBLE CURRENCY

See NONCONVERTIBLE CURRENCY.

palgrave

0

-24.64

17.4

0

22.75

20.9

14.31

2.5

27.87

INCORPORATED (INC)

In the United States, a CORPORATION that is pub- licly traded.

palgrave

0

68.77

6.4

0

7.35

6.3

9.92

5.5

8.04

INCORPOREAL INTEREST

The right to an INSURABLE INTEREST in a des- ignated ASSET, conveyed when the assets are pledged as COLLATERAL.

palgrave

0

52.19

10.7

0

10.21

11.1

12.06

13.5

16.02

INCURRED LOSS

In INSURANCE, a loss that has already occurred, whether or not the INSURER has paid a SETTLEMENT to the INSURED. See alsoINCURRED LOSS RATIO.

palgrave

0

67.76

6.8

0

9.38

7.7

8.84

7

9.8

INCURRED LOSS RATIO

A measure of how much of an INSURER’s PREMIUM is used to cover losses, computed as:where Lossinc is the sum of INCURRED LOSSES and Pr is premium earned. The larger the ratio, the greater the amount of premium that is used to coverlosses.

palgrave

0

58.11

10.5

0

8.36

10.7

9.11

13.75

12.32

INDEMNIFICATION

The process of guaranteeing payment or recompense should a party suffer a specified loss.

palgrave

0

48.81

9.9

0

13.22

11.1

8.84

9

14.17

INDEMNITY COMPANY

An INSURER that specializes in UNDERWRITING a range of PROPERTY AND CASUALTY INSURANCE covers.

palgrave

0

14.97

14.7

0

15.25

12.8

13.35

13

22.74

INDEMNITY CONTRACT

An INSURANCE CONTRACT that provides the INSURED with restitution for actual losses sustained. The indemnity contract, which includes PROPERTY AND CASUALTY INSURANCE and LIABILITY INSURANCE, is designed to return the insured to the financial state it occu- pied prior to the loss. See also INDEMNITY, VALUED CONTRACT.

palgrave

0

30.16

13

14.1

14.9

13.4

10.8

11.5

13.09

INDEMNITY TRIGGER

A conditional event in an INSURANCE-LINKED SECURITY that causes suspension of INTEREST and/or PRINCIPAL when actual losses sustained by the ISSUER reach a predefined amount. See also INDEX TRIGGER, PARAMETRIC TRIGGER.

palgrave

0

30.36

12.9

0

16.47

14.7

13.06

12.25

17.81

INDENTURE

(1) The written terms and conditions of a BOND or NOTE issue, which generally includes details regarding form of SECURITY, INTEREST,CALL/PUT provisions, COVENANTS, EVENTS OF DEFAULT, and PRINCIPAL repayment. The indenture also defines the rights, privileges, and OBLIGATIONS of the ISSUER, INVESTOR, and TRUSTEE related to the initial provision of CAPITAL and the timely payment of interest and repayment of principal. (2) A DEED that relates to the transfer of a landed estate.INDEPENDENT FINANCIAL ADVISOR.

palgrave

0

16.49

20.3

0

15.39

24.6

13.29

28.75

23.53

INDEX (

1) A statistical measure that combines disparate data into a single reference, which becomes a BENCHMARK for some base year of computation. An index can be computed in various forms, either without a weighting (i.e., a pure price index equal to the price in the current period divided by the price in the base period), or with a weighting (i.e., as in the CURRENT WEIGHTED INDEX and the BASE WEIGHTED INDEX). (2) A basket of ASSETS that are com- bined into a single, often tradable, representation. (1) See also INDEXATION.PROGRAM TRADING.

palgrave

0

25.29

21

0

10.58

24.5

10.75

27.75

22.16

INDEX FUND

A MUTUAL FUND that GUARANTEES INVESTORS returns based on a defined market INDEX or subindex. Index funds generally fea- ture lower costs than actively managed funds and are favored by investors who do not believe that a market index can be exceeded over the long term. Also known as TRACKER FUND. See also INDEXING, PASSIVE INVESTMENT STRATEGY.

palgrave

0

56.96

8.9

11.2

10.84

9.5

10.99

8.125

11.33

INDEX FUTURE

A FUTURES CONTRACT, bought or sold via an EXCHANGE, which references a specific BENCHMARK EQUITY INDEX, index sector, or equity BASKET. See also COMMODITY FUTURE, CURRENCY FUTURE, INTEREST RATE FUTURE.

palgrave

0

30.87

12.7

0

13.85

13.1

11.22

11

14

INDEX-LINKED ANNUITY

An ANNUITY with payments to the BENEFICIARY that are linked to a specified INDEX.

palgrave

0

48.81

9.9

0

9.91

8.5

11.1

9

14.17

INDEX OPTION

An EXCHANGE-TRADED or OVER-THE-COUNTER OPTION involving a broad STOCK INDEX. VANILLA and COMPLEX OPTIONS can be bought and sold on a broad range of indexes, and are typically con- tracted for CASH SETTLEMENT. See also COMMODITY OPTION, CURRENCY OPTION, EQUITY OPTION, INTEREST RATE OPTION.

palgrave

0

39.63

11.4

13.6

13.1

12.2

10.11

10.666667

12.24

INDEX REBALANCING

A periodic process where constituents of a traded or tradable INDEX are added or removed, to ensure that the index remains con- sistent with its definition of eligible constituents. Constituents may change as a result of MERGERS or ACQUISITIONS, increase or decrease in MARKET CAPITALIZATION beyond certain levels, and so forth. INVESTORS that BENCHMARK their PORTFOLIOS to particular indexes must go through simi- lar readjustment exercises in order to minimize TRACKING ERROR.

palgrave

0

30.2

15

14.1

15.15

17.2

12.28

15.666667

15.71

INDEX TRANCHE

A form of SINGLE TRANCHE COLLATERALIZED DEBT OBLIGATION that is based on standard quoted CREDIT DEFAULT SWAP INDEXES, including those related to ITRAXX INDEXES.

palgrave

0

30.2

15

0

15.67

17.5

14.04

18

17.93

INDEX TRIGGER

A conditional event in an INSURANCE-LINKED SECURITY that causes suspension of INTEREST and/or PRINCIPAL when the value of a recognized third-party index used to track RISK exposure or loss experience reaches a certain threshold. See also INDEMNITY TRIGGER, PARAMETRIC TRIGGER.

palgrave

0

17.34

15.8

0

16.24

16.5

12.13

16

19

INDEXATION

The process of linking a particular economic or financial action to a base reference INDEX. Indexation may be used to link payments and receipts to an INFLATION index in order to adjust for rising prices of goods and services.

palgrave

0

51.68

10.9

0

10.39

11

11.08

12.75

13.95

INDEXING

A PASSIVE INVESTMENT STRATEGY based on replicating the performance of a specific INDEX with a minimum of TRACKING ERROR. See also ACTIVE INVESTMENT STRATEGY, INDEX FUND.

palgrave

0

32.9

11.9

0

13.27

11.2

12.18

10.5

14.43

INDICATED MARKET

An estimated TRADING range for a SECURITY that has been halted on an EXCHANGE as a result of pending news or an ORDER IMBALANCE. The indicated market is a gauge of where the security may trade once it reopens, although SUPPLY and DEMAND forces ultimately determine the actual starting level.

palgrave

0

37.64

14.2

0

10.74

13.9

10.88

16.5

15.6

INDICATION OF INTEREST (IOI)

Preliminary indication by an INVESTOR of possible interest in purchasing a NEW ISSUE of SECURITIES. Since IOIs aregathered informally while securities are still in the REGISTRATION process, the interest is considered nonbinding; IOIs cannot be regarded as solicitation (by the UNDERWRITER) or commitment (by the investor). IOIs are an essential part of the BOOK-BUILDING process and provide UNDERWRITERS with valu- able input on pricing and demand. Also known as CIRCLE.

palgrave

0

28.33

13.7

15.9

14.67

14.3

10.14

13.75

16.14

INDICATIVE PRICE

See INDICATIVE QUOTE.

palgrave

0

59.97

5.6

0

9.23

9.9

14.31

1.5

14.53

INDICATIVE QUOTE

A BID and/or OFFER supplied by a DEALER or MARKET MAKER to a BROKER or client that cannot be regarded as certain, but as a guide or estimate for informational purposes. Only when EXECUTION appears more likely to occur will the dealer provide an actionable FIRM QUOTE. Also known as INDICATIVE PRICE. See also QUOTED SPREAD.

palgrave

0

57.27

8.8

10.7

9.27

8.1

9.41

7.75

10.6

INDICATORS

See ECONOMIC .

palgrave

0

-6.7

14.7

0

1.3

7.8

11.63

1.5

20.8

INDIRECT LOSS

See CONSEQUENTIAL LOSS.

palgrave

0

34.59

9.2

0

13.12

13

9.05

1.5

14.53

INDIRECT SHAREHOLDER

See NOMINEE SHAREHOLDER.

palgrave

0

9.21

12.7

0

15.03

14.6

14.31

2.5

27.87

INDIRECT STAKEHOLDERS

In GOVERNANCE, the parties impacted by a company’s activities and actions in a less obvious, immediate, or direct manner than DIRECT STAKEHOLDERS; this group generally includes REGULATORS, taxpayers, and competitors.

palgrave

0

-1.28

20.9

0

18.11

22.9

13.02

26

26.67

INDUSTRIAL PAPER

COMMERCIAL PAPER issued by a nonfinancial com- pany. See also FINANCIAL PAPER.

palgrave

0

31.55

10.4

0

10.08

7.9

11.83

3.5

12.4

INDUSTRIAL REVENUE BOND

In the United States, a form of MUNICIPAL BOND issued by a state or local government on behalf of a CORPORATION that is engaged in a development project on behalf of the municipality. Thebond may be backed by real ASSETS, such as property or buildings. Also known as INDUSTRIAL DEVELOPMENT BOND.

palgrave

0

45.76

11.1

12.5

9.74

9.7

9.43

11.166667

11.51

INELIGIBLE BILL

A BILL OF EXCHANGE that cannot be DISCOUNTED by another BANK or CENTRAL BANK.

palgrave

0

65.73

7.6

0

8.23

7.1

6.59

8

8.46

INFLATION

The rate of increase in prices of goods and services. Inflation can be measured at the wholesale level through indexes such as the PRODUCER PRICE INDEX, or at the retail level through the CONSUMER PRICE INDEX, RETAIL PRICE INDEX, or HARMONIZED INDEX OF CONSUMER PRICES. See also COST , DEFLATION, DEMAND , NOMINAL INTEREST RATE, REAL INTEREST RATE.

palgrave

0

52.49

10.6

12.5

11.84

12.4

9.08

12.333333

12.48