Cyber*School

A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique contends that a portfolio of different kinds of investments will, on average, yield higher returns and pose a lower risk than any individual investment found within the portfolio. Diversification strives to smooth out unsystematic risk events in a portfolio so that the positive performance of some investments will neutralize the negative performance of others. Therefore, the benefits of diversification will hold only if the securities in the portfolio are not perfectly correlated.

Interest income by investing in so-called risk-free assets. (Debt securities) eg german federal loans.

The theoretical rate of return attributed to an investment with zero risk. The risk-free rate represents the interest on an investor's money that he or she would expect from an absolutely risk-free investment over a specified period of time. In practice, however, the risk-free rate does not technically exist; even the safest investments carry a very small amount of risk. Thus, investors commonly use the interest rate on a three-month U.S. Treasury bill as a proxy for the risk-free rate because short-term government-issued securities have virtually zero risk of default.

abbr. Return on Capital Employed

abbr. Rest-of-Day

abbr. Return on equity

abbr. Return on Investment

medium- or long-term credit with an agreement, that the interest rate is adjusted to a stipulated reference rate (e.g. EURIBOR or LIBOR)

interest rate swap with an irregular nominal structure. The nominal structure is fixed at the beginning.

A calculation method for a reference rate that allows the controllability of the interest rate and margin results in transactions without direct repricing and maturity structure (baw). Adjustment is calculated with a time delay from the average of the past months or years.

abbr. Return On Risk Adjusted Capital

Designation for the opening and an associated closing transaction at a Future Exchange. The total transaction costs are often calculated on a so-called round-trip basis.

The RPI is an inflationary indicator that measures the change in the cost of a fixed basket of retail goods.

abbr. Risk Weighted Assets