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Superglossary - Finance Category: Economy and Finance > Finance Date & country: 16/12/2013, USA Words: 5410

Less-Developed Countries (Ldcs)
Also known as emerging markets. Countries who's per capita GDP is below a World Bank-determined leve

Lessee
An entity that leases an asset from another entity.

Lessor
An entity that leases an asset to another entity.

Letter Of Comment
A communication to the firm from the SEC that suggests changes to its registration statement.

Letter Of Credit (LOC)
A form of guarantee of payment issued by a bank on behalf of a borrower that assures the payment of

Letter Of Intent
An assurance by a mutual fund shareholder that a certain amount of money will be invested monthly, i

Letter Stock
Privately placed common stock, so-called because the SEC requires a letter from the purchaser statin

Level
Used in the context of general equities. Price measure of an indication.

Level Debt Service
A municipal charter provision that debt payments must be relatively equal from year to year so that

Level Load
A mutual fund that charges a permanent sales charge, usually at some fixed percentage. See

Level Pay
Scheduling principal and interest payments (P&I) due under a mortgage so that total monthly payment

Level Term Insurance
A life insurance policy with a fixed face value and increasing premiums.

Level-Coupon Bond
Bond with a stream of coupon payments that remain the same throughout the life of the bond.

Leverage
The use of debt financing, or property of rising or falling at a proportionally greater amount than

Leverage
The relationship between debt and equity. A company is considered highly leveraged if its levels of

Leverage Clientele
A group of shareholders who, because of their personal leverage, seek to invest in corporations that

Leverage Ratios
Measures of the relative value of stockholders, capitalization, and creditors obligations, and of th

Leverage Rebalancing
Making transactions to adjust (rebalance) a firm's leverage ratio to a target ratio.

Leveraged Beta
The beta of a leveraged required return; that is, the beta as adjusted for the degree of leverage in

Leveraged Buyout (LBO)
A transaction used to take a public corporation private that is financed through debt such as bank l

Leveraged Company
A company that has debt in its capital structure.

Leveraged Equity
Stock in a firm that relies on financial leverage. Holders of leveraged equity experience the benefi

Leveraged Investment Company
An investment company or mutual fund entitled to borrow capital for its operations. Also, an investm

Leveraged Lease
A lease arrangement under which the lessor borrows a large proportion of the funds needed to purchas

Leveraged Portfolio
A portfolio that includes risky assets purchased with funds borrowed.

Leveraged Recapitalization
Often used in risk arbitrage. A public company takes on significant additional debt with the purpose

Leveraged Required Return
The required return on an investment when the investment is financed partially by debt.

Leveraged Stock
Stocks financed with credit, such as that purchased on a margin account.

Liabilities
Obligations used to fund the operations of a business, including bank loans, accounts payable, and a

Liability
A financial obligation, or the cash outlay that must be made at a specific time to satisfy the contr

Liability Funding Strategies
Investment strategies that select assets so that cash flows will equal or exceed the client's obliga

Liability Insurance
Insurance guarding against damage or loss that the policyholder, may cause another person in the for

Liability Swap
An interest rate swap used to alter the cash flow characteristics of an institution's liabilities so

LIBOR
See London Interbank Offered Rate.

Lien
A security interest in one or more assets that lenders hold in exchange for secured debt financing.

Life Annuity
An annuity that pays a fixed amount for the lifetime of the annuitant.

Life Cycle
The lifetime of a product or business, from its creation to its demise or transformation.

Life Expectancy
The length of time that an average person is expected to live, which is used by insurance companies

Life Insurance
An insurance policy that pays a monetary benefit to the insured person's survivors after death.

Life Insurance In Force
The dollar amount of life insurance that a company has issued, measured as the sum of policy face va

Life Insurance Policy
The contract that sets out the terms of life insurance coverage.

Lifetime Reverse Mortgage
A type of mortgage in which a homeowner borrows against the value a home, while retaining title, and

LIFO
See last in, first out.

Lift
An increase in securities prices, as shown by some economic indicator.

Lifted
Refers to over-the-counter trading. Having an offer taken in a stock, followed by the market maker r

Lifting A Leg
Closing out one side of a long-short arbitrage before the other is closed.

Lighten Up
Selling some part of a stock or bond position in a portfolio to realize capital gains or to losses o

Limit On Close Order
An order to buy or sell stock at the closing price only if the price is at a predetermined level or

Limit Order
An order to buy a stock at or below a specified price, or to sell a stock at or above a specified pr

Limit Order Book
A record of unexecuted limit orders maintained by the specialist. These orders are treated equally w

Limit Order Information System
The electronic system supplying information about securities traded on participating exchanges so th

Limit Up, Limit Down
The maximum price change allowed for a commodity futures contract per trading day.

Limitation On Asset Dispositions
A bond covenant that restricts in some way a firm's ability to sell major assets.

Limitation On Conversion
Applies mainly to convertible securities. Possible delay in convertibility. More frequently, the rig

Limitation On Liens
A bond covenant that restricts in some way a firm's ability to grant liens on its assets.

Limitation On Sale-And-Leaseback
A bond covenant that restricts in some way a firm's ability to enter into sale-and-leaseback transac

Limitation On Subsidiary Borrowing
A bond covenant that restricts in some way a firm's ability to borrow at the level of firm subsidiar

Limited Company
A form of business commonly used in the U.K. comparable to incorporation in the U.S.

Limited Discretion
Permission by a client that allows a broker to make certain stock and option trades without first co

Limited Liability
Limitation of loss to what has already been invested.

Limited Partner
A partner who has limited legal liability for the obligations of the partnership.

Limited Partnership
A partnership that includes one or more partners who have limited liability.

Limited Payment Policy
Life insurance providing full life protection but requiring premiums for only part of the customer's

Limited Risk
The risk inherent in options contracts, which is much lower than that of a futures contract, which h

Limited Warranty
A warranty with certain conditions and limitations on the parts covered, type of damage covered, and

Limited-Liability Instrument
A security, such as a call option, in which the owner can lose only the initial investment.

Limited-Tax General Obligation Bond
A general obligation bond of a government backed by specified or constrained revenue sources.

Line Of Credit
The amount of short-term credit available to a business from banks.

Line Of Credit
An informal loan arrangement between a bank and a customer allowing the customer to borrow up to a p

Linear Programming
Technique for finding the maximum value of some equation, subject to stated linear constraints.

Linear Regression
A statistical technique for fitting a straight line to a set of data points.

Lintners Observations
John Lintner's work (1956) suggests that dividend policy is related both a target level, and to the

Lipper Mutual Fund Industry Average
The average level of performance for all mutual funds, as reported by Lipper Analytical Services.

Liquid Asset
Asset that is easily and cheaply turned into cash-notably, cash itself and short-term securities.

Liquid Yield Option Note (LYON)
Zero-coupon, callable, putable, convertible bond developed by Merrill Lynch & Co.

Liquidating Dividend
Payment by a firm to its owners from capital rather than from earnings.

Liquidation
Occurs when a firm's business is terminated. Assets are sold, proceeds are used to pay creditors, an

Liquidation Rights
The rights of a firm's securityholders in the event the firm liquidates.

Liquidation Value
Net amount that could be realized by selling the assets of a firm after paying the debt.

Liquidator
Person appointed by an unsecured creditor in the United Kingdom to oversee the sale of an insolvent

Liquidity
A high level of trading activity, allowing buying and selling with minimum price disturbance. Also,

Liquidity
A company's ability to generate cash in a timely manner in order to meet its obligations, often meas

Liquidity Diversification
Investing in a variety of maturities to reduce the price risk to which holding long bonds exposes th

Liquidity Fund
A California company that buys real estate limited partnership interests at 25% to 35% lower than th

Liquidity Preference Hypothesis
The argument that greater liquidity is valuable, all else equal. Also, the theory that the forward r

Liquidity Premium
Forward rate minus expected future short-term interest rate.

Liquidity Ratios
Ratios that measure a firm's ability to meet its short-term financial obligations on time, such as t

Liquidity Risk
The risk that arises from the difficulty of selling an asset in a timely manner. It can be thought o

Lisbon Stock Exchange (LSE)
Stock exchange trading stocks, bonds, and unit trusts. The BVL general index is the exchange's offic

Listed Firm
A company whose stock trades on a stock exchange, and conforms to listing requirements.

Listed Option
An option that has been accepted for trading on an exchange.

Listed Security
Stock or bond that has been accepted for trading by one of the organized and registered securities e

Listed Stocks
Stocks that are traded on an exchange.

Listing
In the context of real estate, written agreement between a property owner and a real estate broker t

Listing Broker
In the context of equity, when a stock is traded in exchange it is said to be listed. A licensed rea

Listing Requirements
Requirements, including minimum shares outstanding, market value, and income, that are laid down by

Living Benefits
Life insurance benefits from which the insured can draw cash while still living, usually in the case

Lloyds Of London
A marketplace in London for underwriting syndicates.

Load
The sales fee charged to an investor when shares are purchased in a load fund or annuity. See

Load Fund
A mutual fund that sells shares with a sales charge-typically 4% to 8% of the net amount indicated.