A comprehensive A-to-Z listing of 2,500 financial terms
- Value-added tax
- Method of indirect taxation whereby a tax is levied at
each stage of production on the value added at that specific stage.
- Value-at-Risk model (VAR)
- Procedure for estimating the
portfolio losses exceeding
some specified proportion based on a statistical analysis of
historical market price trends,
- Value additivity principal
- Prevails when the value of a whole group of
assets exactly equals
the sum of the values of the individual assets that make up
the group of assets. Stated differently, the principle that
the net present value
of a set of independent projects is just the sum of the net
present values of the individual projects.
- Value date
- In the market for
Eurodollar deposits and
value date refers to the delivery date
of funds traded. Normally it is on
two days after a transaction is agreed upon and the future date
in the case of a forward
foreign exchange trade.
- Value dating
- Refers to when value or credit is given for funds
transferred between banks.
- Value manager
- A manager who seeks to buy
stocks that are at a
discount to their
"fair value" and sell them at or in excess of that
value. Often a value stock is one with a low price to book value ratio.
- Vanilla issue
- A security issue
that has no unusual features.
- A value determined within the context of a model.
Also called endogenous
- Variable annuities
- Annuity contracts
in which the issuer pays a periodic amount linked to the
investment performance of an
- Variable cost
- A cost that is directly proportional to the volume of output produced. When production is zero, the variable cost is equal to zero.
- Variable life insurance policy
- A whole
life insurance policy that provides a death benefit
dependent on the insured's portfolio
market value at the time of death. Typically the company invests
premiums in common stocks, and hence
variable life policies
are referred to as equity-linked policies.
- Variable price security
- A security,
such as stocks or
bonds, that sells at a
fluctuating, market-determined price.
- Variable rate CDs
certificate of deposits that pay
interest periodically on roll dates.
On each roll date, the coupon on
the CD is adjusted to reflect current market rates.
- Variable rated demand bond (VRDB)
- Floating rate bond
that can be sold back periodically to the
- Variable rate loan
- Loan made at an interest
rate that fluctuates based on a base
interest rate such as the Prime Rate or
- A measure of dispersion of a set of data points
around their mean value.
The mathematical expectation of the squared deviations from the mean. The square root
of the variance is the standard deviation.
Variance minimization approach to tracking
- An approach to bond
indexing that uses historical data to estimate the
variance of the
- Variance rule
- Specifies the permitted minimum or maximum quantity
of securities that can be
delivered to satisfy a TBA trade.
For Ginnie Mae, Fannie Mae, and Freddie Mac
securities, the accepted variance is plus or minus
2.499999 percent per million of the
par value of the
- Variation margin
- An additional required deposit to bring an
investor's equity account up to
the initial margin level when
the balance falls below the
- Venture capital
- An investment in a start-up business that is perceived
to have excellent growth
prospects but does not have access to
Type of financing sought by early-stage companies seeking to
- Vertical acquisition
in which the acquired firm
and the acquiring firm are
at different steps in the production process.
- Vertical analysis
- The process of dividing each
expense item in the
of a given year by net sales to identify expense items that
rise faster or slower than a change in sales.
- Vertical merger
- A merger in
which one firm acquires another firm that is in the same
industry but at another stage in the production cycle.
For example, the firm being
acquired serves as a supplier to
the firm doing the acquiring.
- Vertical spread
- Simultaneous purchase and sale of two
options that differ only
in their exercise price.
- Virtual currency option
- A new option contract
introduced by the PHLX in
1994 that is settled in US$ rather than in the
These options are also called 3-Ds (dollar denominated delivery).
- Visible supply
- New muni bond
issues scheduled to come to market within the next 30 days.
- A measure of risk based
on the standard
deviation of investment fund performance over 3 years.
Scale is 1-9; higher rating indicates higher risk.
Also, the standard
deviation of changes in the logarithm of an asset
price, expressed as a yearly rate. Also, volatility is a
variable that appears in option pricing formulas. In the option pricing
formula, it denotes the volatility of the underlying asset return
from now to the expiration of the option.
up to 7. 99
20. 00-22. 99
8. 00-10. 99
23. 00-25. 99
11. 00-13. 99
26. 00-28. 99
14. 00-16. 99
29. 00 and up
17. 00-19. 99
- Volatility risk
- The risk in the value of
portfolios due to the
unpredictable changes in the volatility of the
- This is the daily number of
shares of a
security that change
hands between a buyer and a seller.
- Voting rights
- The right to vote on matters that are put
to a vote of security
holders. For example the right to vote for directors.