LIABILITY SWAP
Exchanging interest rates between two parties, typically large firms, that is designed to modify the cash flow attribution of an institution's liabilities in order to provide a better match with its assets. Two presently identical (in nominal value) cash flows are swapped, usually a floating rate is exchanged for a fixed rate of income. Every company gets a better interest rate by switching with the other than selecting a more traditional financing way.
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Affirmative Covenant
A kind of contract or promise that requires a party to conduct some action. For example, a bond covenant which provides that the issuer must delive ...
Pure Risk
A risk where loss is the only potential outcome; there is no positive result. A pure risk is related to events that are out of control of the risk- ...
Efficiency
Performance level describing a process which uses the lowest amount of inputs to come up with the greatest amount of inputs. It is relative to usin ...
Tax Free
Goods and/or financial products that are not taxable. Having the tax free status allows an entity to save money and encourages additional spending ...
Reprice
A situation that is most often allowed for company executives or high-level employees. It permits them to trade in their options that out of the mo ...
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The Types of Stock
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A Guide to Your Personal Income Tax: Common Filing Mistakes
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