Words to be used in conjunction with the Boomerang Unit
Terms in this set (26)
Credit Default Swap
An arrangement in which one party buys protection against the risk of default on a bond by paying an agreed premium to another party, the seller of protection, in return for which the protection seller agrees to compensate the protection buyer if the bond defaults.
a loan granted to individuals with poor credit histories who do not qualify for a conventional mortgage
An aggressively managed portfolio of investment strategies known for risky and sometimes speculative bets in a wide range of markets to generate high returns.
Company's ability to pay interest when due and repay debt at maturity (ability to survive over a long period of time
Bankrupt; unable to pay debts and/or discharge liabilities
Availability of resources to meet short-term cash requirements.
describes an asset that cannot be quickly converted into cash without much loss of value.
American economist and advisor to Ronald Reagan; argued that government should cut support of social services such as housing, education, and health insurance; limit business subsidies; and retreat from regulation of all kinds.
Selling a stock you DONT own, with the hope of buying it back later at a lower price and replacing the borrowed stock
currency risk hedging
A strategy used in currency markets where you are offsetting risk. Example: A person makes a deal to purchase X foreign currency in Y days for a price of $Z. Person can watch the price of that currency in the days leading up to the sale date and can try to purchase same amount of currency at a lower rate. If they are unsuccessful, they know that they do have a guaranteed buy at a manageable amount of risk.
An investment strategy that attempts to lower risk by buying securities that have offsetting risk characteristics. A perfect hedge eliminates risk entirely. Hedging strategies lower the return because there is a cost involved in reducing risk.
A share of ownership in a corporation.
A certificate issued by a government or private company which promises to pay back with interest the money borrowed from the buyer of the certificate: The city issued bonds to raise money for putting in new sewers. (Key: A LOAN)
(adj.) fragrant, smelling strongly; tending to arouse memories or create an aura
Difficult to understand
using cash from newer investors to pay off older ones, consists of paying "investment profits" to clients, not from profits, but from the money that other clients invest.
Foreseeing the future;foresight
a British lawyer who speaks in the higher courts of law
(v.) to remove material considered offensive (from a book, play, film, etc.)
non-recourse debt (as in mortgage)
A type of loan that is secured by collateral, which is usually property. If the borrower defaults, the issuer can seize the collateral, but cannot seek out the borrower for any further compensation, even if the collateral does not cover the full value of the defaulted amount. This is one instance where the borrower does not have personal liability for the loan
(adj.) fat; having a large, bulky body
The seizure by a government of a privately owned business or personal property for a proper public purpose and with just compensation.
The process by which individuals are brought into a beneficial relationship with the state, making them dependent on the state for certain rewards
trading that occurs when a bank or financial institution risks its own capital to take speculative trading positions in financial markets in the hope of making a profit
Bonds issued by state and local governments
(v) castrated; neutered