Cyber*School

An option that can be exercised at any time between purchase and expiration date.

The effective annual rate of return taking into account the effect of compounding interest. The resultant percentage number assumes that funds will remain in the investment vehicle for a full 365 days.

abbr. Annual percentage rate

abbr. Annual percentage yield

widely riskless profiting of differences in price, when the same instrument (security, currency, commodity etc.) is traded at different markets, the remaining risk is called basis risk

Auto-Regressive Conditional Heteroskedasticity a mathematical model to forecast future variances on the basis of past variances; widely used in risk management

Organizational form of the settlement on the Vienna Stock Exchange. All completed transactions are netted and settled on each trading day and met three business days later (T + 3).

see also alternative standardised approach

see Ask rate

Limit on the ask side, the ask price

see ask rate

The price a seller is willing to accept for a security, also known as the offer price. Along with the price, the ask quote will generally also stipulate the amount of the security willing to be sold at that price. Opposite of the bid price.

Purchase price, including commissions and other costs used to calculate the capital gains and losses for tax purposes.

An investment strategy that aims to balance risk and reward by apportioning a portfolio's assets according to an individual's goals, risk tolerance and investment horizon. The three main asset classes - equities, fixed-income, and cash and equivalents - have different levels of risk and return, so each will behave differently over time.

An ABS is an asset backed security fixed interest security, which has payment claims against a special purpose entity (also called Special Purpose Vehicle) as its object. The payment claims are covered (backed) by a pool of receivables (assets) that are transferred to the SPV and are available for the holders of the asset-backed securities (investors) as the basis of liability. Sellers of the receivables in such a transaction are usually banks, thus making their loans tradable.

(Asset Correlation) The correlation of returns on two risky assets.

A risk-management committee in a bank that generally comprises the senior-management levels of the institution. The ALCO's primary goal is to evaluate, monitor and approve practices relating to interest and liquidity risk due to imbalances in the capital structure.

Optimized balancing of the assets, liabilities and off-balance sheet transactions among the objectives of profitability, liquidity and security within the scope of the regulatory framework

the packing of mortgages, loans and other receivables into interest-bearing securities (see also asset-backed security, securitisation)

Interest Rate Swap or currency swap which is related to an asset,by means of an asset swap the type of the interest income is changed from fixed into variable or vice versa