Cyber*School

convexity expresses the non-linearity of a financial instrument (e.g. bond, future, option) bonds: c. is a measure of the change of the modified duration if interest rate changes options: c. is called gamma which is a measure of the change of delta if the price of the underlying changes

a counterparty recognised by supervisors as not requiring 'haircuts' in calculation regulatory capital for repo-style transactions.Counterparties that qualify for this treatment include sovereigns, central banks and public-sector entities, regulated pension funds and recognised clearing organisations

A bond that is issued by an industrial company. In case of corporate bonds, the issuing company is liable with its assets.

Represents responsible on long-term value creation focused management and control

Correlation is a measure of the degree to which changes in two variables are related to each other. It is usually expressed as a coefficient between plus one (perfectly correlated) and minus one (perfectly negatively correlated).

the correlation of the credit ratings or rating changes of entities in a portfolio

The regular deposit of constant amounts in a mutual fund has the advantage that the investor buys the shares at different issue prices at a lower average price than the regular purchase of a constant number of shares in the same period. In equal monthly payments into a fund, the investor receives more shares with falling share value and fewer shares with an increasing share value. The positive effect of dollar-cost averaging is particulary profitable with fluctuating rates, as they usually occur in equities and equity funds.

(CC) All agencies or departments of the Bank who are not involved in the administration of the daily business, not used in direct support of a profit center in the daily business and can not be directly attributed to a single performance. These include, for example, Auditing, Accounting, Controlling, Human Resources department or board of directors.

Costs incurred by the possession of an asset item.

ratio which establishes costs in per cent of gross earnings

in general, a counterparty is any of the participants in a financial contract

The risk of financial loss arising out of holding a particular contract as a result of one or more parties to the relevant contract failing to fulfil its financial obligations under the contract.Counterparty credit risk can be managed through the use of an ISDA Master Agreement, which allows netting of all exposures between two counterparties (see also settlement risk)

The counterparty limit is a credit risk limit that restricts the credit risk for each counterparty.

Equity funds that invest only in a particular country or in specially combined groups of countries (eg. Southern Europe or Latin America). They have a different risk profile than funds that diversify their investments across many investment countries.

Risk of domestic creditor that his claim to a foreign borrower, despite willingness to pay is not paid on time and for the full amount because government intervention prevent the trade and payment system. (eg foreign exchange controls or remittance locks in the country of the buyer of the goods).

see also transfer risk

security which certifies the claim of the bearer to receive a payment of interest or dividendcoupon is also used as a term for a interest payment resp. for the interest rate of a financial instrument.

Date on which the payment of interest (the coupon) of an interest-bearing instrument has to be paid.

The coupon sheet consists of individual parts with which certain rights are asserted but which depend on the nature of the security.

interest rate swap in which a fixed interest rate (coupon) is exchanged against a variable interest rate (e.g. EURIBOR, LIBOR) opposite: basis swap