The Palgrave Macmillan Dictionary of Finance, Investment and Banking

The Palgrave Macmillan Dictionary of Finance, Investment and Banking

Erik Banks

© Erik Banks 2010

All rights reserved. No reproduction, copy or transmission of thispublication may be made without written permission.

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Any person who does any unauthorized act in relation to this publicationmay be liable to criminal prosecution and civil claims for damages.

The author has asserted his right to be identified as the author of this workin accordance with the Copyright, Designs and Patents Act 1988.

First published 2010 byPALGRAVE MACMILLAN

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Softcover reprint of the hardcover 1st edition 2010 978-0-230-23829-9

ISBN 978-1-349-58938-8 ISBN 978-0-230-25121-2 (eBook)

DOI 10.1057/9780230251212

v

Contents

Acknowledgments vii

The author viii

Introduction ixSummary of colloquialisms, Foreign language terms, and acronyms xi

Numeric 1

A 3

B 39

C 74

D 138

E 172

F 200

G 234

H 251

I 259

J 288

K 291

L 294

M 316

N 343

O 361

P 375

Q 416

R 419

S 455

T 503

vi Contents

U 526

V 534

W 543

X 550

Y 551

Z 554

Appendix 556

References 564

vii

Acknowledgments

I would like to extend my thanks and appreciation to Lisa von Fircks at Palgrave Macmillan for support in moving forward with a new version of this project. Thanks are also due to the editing, production, and marketing teams at Palgrave for their work in producing the book. My deepest thanks, as always, go to Milena.

EBMaine, 2009

viii

The Author

Erik Banks is responsible for risk management of the Corporate and Investment Banking division at the European universal bank UniCredit. Over the past 23 years he has held senior risk positions at Citibank, Merrill Lynch, and in the hedge fund sector in New York, Tokyo, Hong Kong, London, and Munich. He is the author of more than 20 books on risk, derivatives, emerging markets, and governance.

ix

Introduction

The Palgrave Macmillan Dictionary of Finance, Investment and Banking is a revised and comprehensive reference book that explains the formal and informal ter-minology of finance. We have structured the book much like any other dic-tionary so that it can be used as an easy (and hopefully frequent) guide and reference. Perhaps the hardest part in a project of this type is limiting the scope of content. Accordingly, as we set out to prepare this text we operated under two fundamental rules:

Rule 1: Include the most commonly encountered terms in a particular field.

Rule 2: Limit the fields to the essentials of the following:

accounting• business economics• business law• commercial banking• corporate finance• credit and equity analysis• insurance/reinsurance• investment banking• risk management• securities and investment• trading/derivatives•

In addition to formal terms, we decided to include some of the colloquialisms that have crept into the business vernacular over the years. We believe this is important because much of what happens in the banking, securities, asset management, and insurance industries is based to a degree on the informal language of the trade. So, when the reader hears of the “hung deal” in a secur-ities underwriting, “stripping the yield curve” in a trading environment, or “spinning” in financial regulations, he or she is encountering the real language of finance; these terms convey concisely, efficiently, and sometimes colorfully what might otherwise take whole sentences to express. We have tried to take some care with colloquialisms by including terms that seem to have survived for a period of time. Obviously, new phases of market development can lead to the creation of new words, and these may ultimately fall out of use when the market phase subsides or changes. We have tried to be cognizant of this by focusing on the enduring terms of the marketplace.

There are, of course, instances where a particular concept or definition is known by different terms, even in the same marketplace. Rather than repeating

x Introduction

definitions, we refer the reader to the single source for the definition, using some judgment about which of the two, and sometimes three, words serves as the “anchor” term.

How to use this dictionary

The dictionary contains clear, concise, easy-to-read financial definitions and descriptions, arranged in alphabetical order. Each definition ranges from two to ten sentences in length (depending on topic and complexity).

Cross-references to other terms in the dictionary are indicated in CAPITALS.

Foreign and colloquial terms are distinguished as follows:

Arabic: ARB• Colloquial: COL• French: FR• German: GER• Italian: ITL• Japanese: JPN• Korean: KOR• Latin: LAT• Spanish: SPN•

Where relevant “Also known as” references for terms that are known by mul-tiple names are included.

Cross-references to additional terms within the dictionary are included where we believe these can add supplementary information or points of view.

References to external sources of information are included where we believe these may be of use to the reader.

Examples, charts, and figures are incorporated where additional clarity and information can be communicated. Where appropriate, we have also used very simple formulas and equations to convey certain terms, but these are non-technical and suitable for general business readers.

xi

Summary of Colloquialisms, Foreign Language Terms, and Acronyms

Colloquialisms

ABOVE THE LINEACCELERATORACTIVE BETACTIVE BOXACTUALSAFTER THE BELLALGOALGO TRADINGALL-INALLIGATOR SPREADALPHABET STOCKALT-AANGELANKLE BITERARBARM’S LENGTHASIAN TAILASSET STRIPPERAUNT MILLIEAXEBABY BONDBACK BOOKBACK DOORBACK DOOR LISTINGBACK OFFICEBACK UP THE TRUCKBAD BANKBANKMAILBAY STREETBAZAARBEARBEAR CLOSINGBEAR HUGBEAR RAID BEAR SLIDE

xii Summary of Colloquialisms, Foreign Terms, Acronyms

BEAR SPREADBEAR SQUEEZE BEAR TRAPBEATING THE GUNBEAUTY CONTESTBED AND BREAKFASTINGBEIGE BOOKBELLS AND WHISTLESBELLWEATHERBELLY OF THE CURVEBELLYUPBELOW THE LINEBENCHMARKBID WHACKERBIG BANGBIG BOARDBIG DOGBIG FIGUREBIG UGLIESBLACK BOXBLACK KNIGHTBLACK MONDAYBLACK MONEYBLACK SWANBLANK CHECK PREFERREDBLIND BIDBLOWOUTBLUE CHIPBOARD LOTBOBLBOGEYBOILER ROOMBOILERPLATEBOND CROWDBOND VIGILANTESBOOKBOOKRUNNERBOOTSTRAPBOOTSTRAPPINGBOTTOM LINEBOTTOM FISHINGBOUGHT DEALBOUTIQUEBRADY BONDBREAKING SYNDICATE

Summary of Colloquialisms, Foreign Terms, Acronyms xiii

BREAKING THE BUCKBRICBRICKS AND MORTARBROKEN DATEBUBABUBBLEBUCKBUCKET SHOPBULGE BRACKETBULLBULL SPREADBUNCHINGBUNDLEBUNNY BONDBUSTED CONVERTIBLEBUY MINUSBUY-SIDEBUY THE BOOKBUYING THE DIPSCABLECAFETERIA PLANCAGECAMELCANDLESTICKCARROT EQUITYCARRYCASH COWCATCH A FALLING KNIFECHASING THE MARKETCHEAPCHECK KITINGCHERRY PICKCHEWABLE PILLCHINESE WALLCHURNINGCIRCLECIRCUIT BREAKERCITYCITY CODECLAWBACKCLEANCLEAN FLOATCLEAN PRICECLONE FUNDCLOSING BELL

xiv Summary of Colloquialisms, Foreign Terms, Acronyms

CLUB DEALCOAT-TAILINGCOLD CALLINGCOMPSCONCERT PARTYCONSOLCONTAGIONCONTRARIANCOOKIE JAR ACCOUNTINGCOOKING THE BOOKSCOOLING OFF PERIODCORNERINGCRACK SPREADCREEPING TAKEOVERCREEPING TENDERCROWDED TRADECROWN JEWEL DEFENSECROWN JEWELSCRUSH SPREADCYLINDERDAISY CHAINDARK POOLDAWN RAIDDEAD CAT BOUNCEDEAD HAND CLAUSEDEAD HAND POISON PILLDEAD MONEYDEATH SPIRALDEEP MARKETDIRTY FLOATDIRTY MONEYDIRTY PRICEDIRTY STOCKDKDOGDOG AND PONY SHOWDOGS OF THE DOWDOUBLE DIPPINGDOWN ROUNDDRAGONDRY POWDERDUMMY DIRECTORDWARFE-MINI

Summary of Colloquialisms, Foreign Terms, Acronyms xv

EASY MONEYELBOWELEPHANTELEPHANT HUNTINGEMBEDDOEPS BOOTSTRAPPINGFALLEN ANGELFALLING KNIFEFALSE MARKETFANNIE MAEFARMER MACFAST MARKETFAST TAPEFAT TAILFENCEFIGHTING THE TAPEFILL OR KILLFINANCIAL SLACKFINE PRINTFIRE SALEFIXED-FIXEDFIXED-FLOATINGFLASH PRICEFLIGHT TO QUALITYFLIP IN PILLFLIP OVER PILLFLIPPERFLOATING-FLOATINGFLOWFOLLOWING THE FORTUNESFOOTSIEFORWARD BUNDLEFREDDIE MACFREE RIDERFREEZE-OUTFRONT BOOKFRONT DOORFRONT OFFICEFRONT RUNNINGFROTHYGAMINGGATEGATHER IN THE STOPSGHOSTING

xvi Summary of Colloquialisms, Foreign Terms, Acronyms

GINNIE MAEGNOMEGNOMES OF ZURICHGOLD BUGGOLDBRICKSGOLDEN HANDCUFFSGOLDEN HANDSHAKEGOLDEN HELLOGOLDEN PARACHUTEGOOD MONEYGRAINSGRANNY BONDGRAVEYARD MARKETGRAY KNIGHTGRAY MARKETGREEKSGREENBACKGREENMAILGREENSHOEGUN JUMPINGGUNSLINGERHAIRCUTHANDLEHARD LANDINGHARVESTHEAD AND SHOULDERSHEAVY MARKETHIGH STREET BANKHIT THE BIDHOT MONEYHUNG DEALICEBERGIN PLAYINCUBATORINFLATION HAWKJOBBERJOBBINGJUNK BONDKAFFIRSKANGAROOSKICKERKILLER BEESKIWILADDERING

Summary of Colloquialisms, Foreign Terms, Acronyms xvii

LAUNDERINGLEGLEGGINGLIAR LOANLIFEBOATLIFT THE OFFERLIFTING A LEGLINELINKERLOBSTER TRAPLOCALLOCKBOXLOCKED MARKETLONG AND WRONGLONG BONDLONG ENDLOONIELOOPHOLESLOTMACARONI DEFENSEMAIN STREETMAKING A BOOKMAKING A MARKETMAPLE BONDMARRIED PUTMATILDAMIDGETMINIMIXED LOTMOMOMONEYNESSMORNING NOTESNAMESNATURALNEAR MONEYNIFTY FIFTYNINJA LOANNOMING THE PIPESNON-DEAL ROADSHOWOFF-THE-RUN SECURITIESOLD LADYOMNIPRESENT SPECTERON-THE-RUN SECURITIESONE-MAN PICTURE

xviii Summary of Colloquialisms, Foreign Terms, Acronyms

OPMOVER THE WALLOVERLINEDPAC MAN DEFENSEPAINTING THE TAPEPAPER MARKETPARENTPARKINGPASSING THE BOOKPASSPORTINGPENNY JUMPINGPENNY STOCKPEOPLE PILLPHANTOM STOCKPIERCING THE CORPORATE VEILPIGPIG ON PORKPIGGY-BACKINGPINGINGPINK SHEETSPINNING THE STRIKEPIPPIPELINEPIPETTEPITPOINTPOISION PILLPOISON PUTPOOP AND SCOOPPORCUPINE PROVISIONPORTFOLIO PUMPINGPOTPRE-PACKPRICE TALKPUFFERYPUKE POINTPUMP AND DUMP PUNTPUNTERPUP COMPANYPURE PLAYQUAD WITCHQUANGOQUIET PERIOD

Summary of Colloquialisms, Foreign Terms, Acronyms xix

RAIDERRAINMAKERRAMPINGRED HERRINGRED-LININGREVERSEREVERSE REPOREVERSE TYINGREVOLVERRICHRIDING THE CURVERIGHTSIZINGRIO TRADEROADSHOWROLLER COASTERROLLING DOWN THE CURVEROUND TRIPRUNNING THE BOOKSSAFE HARBOR RULESANDWICH SPREADSATURDAY NIGHT SPECIALSCALPERSCORCHED EARTH DEFENSESSEATSELL-SIDESELLING AWAYSELLING THE WINGSSHADOW STOCKSHARKSHARK REPELLENTSHELLSHOESHORT AGAINST THE BOXSHORT ENDSHORT SQUEEZESIN STOCKSINKERSIV LITESIZESMART MONEYSMOOTHINGSMURFINGSNAKESNIFFER

xx Summary of Colloquialisms, Foreign Terms, Acronyms

SNOWBALLINGSOFT LANDINGSOFTSSPARK SPREADSPECIALSPIDERSPINNINGSPOOSPRING LOADINGSQUARESQUEEZESTACK AND ROLLSTAGESTALKING HORSESTAPLED STOCKSTICKY DEALSTICKINESSSTOPPED OUTSTORY PAPERSTREETSTREET NAMESTRONG HANDSSTUBSTUCK DEALSUCKER’S RALLYSUPER SENIORSUPERSINKERSWEEPERSWEETENERSWISSIETAG ALONG RIGHTSTAILTAILGATINGTAKE THE OFFERTARGETTEASERTEENYTEXAS HEDGETHIN MARKETTHIRD MARKETTOM NEXTTOMBSTONETONTOO BIG TO FAIL

Summary of Colloquialisms, Foreign Terms, Acronyms xxi

TOP TICKTOPPYTORPEDO STOCKTOXIC ASSETTOXIC POOLTRADED AWAYTRIPLE WITCHING DAYTUNNELTURKEYTURNTWISTINGTYINGUNBUNDLINGUNDERWATERVANILLAVULTURE BIDVULTURE FUNDWALL STREETWALLPAPERWAR CHESTWATERFALLWEAK HANDSWET BARRELSWET LEASEWHIPSAWWHISPER NUMBERSWHISPER STOCKWHISTLEBLOWERWHITE KNIGHTWHITE SQUIREWIDOWS AND ORPHANSWINDING UPWITHOUTWRAPYANKEEYARDYIELD BURNINGZOMBIE

Foreign language terms

AD VALOREMAKTIEBOLAGAKTIENGESELLSCHAFT

xxii Summary of Colloquialisms, Foreign Terms, Acronyms

AMAKUDARIARBITRAGEURAUFSICHTSRATBANCASSURANCEBANQUE D’AFFAIREBANQUE DE FRANCEBANQUE DU CANADABESLOTEN VENNOOTSCHAPBOLSABORDEREAUBORSABOURSEBUNDBUNDESANSTALT FUR FINANZDIENSTLEISTUNGSAUFSICHTBUNDESBANKCAVEAT EMPTORCEDULAS HIPOTECARIASCHAEBOLCOMMISSIONE NAZIONALE PER LA SOCIETA E LA BORSACONSEIL D’ADMINISTRATIONCONSEIL DU SURVEILLANCECORPUSDAIMYODEUTSCHE AKTIENINDEXDEUTSCHE BORSEDEUTSCHE BUNDESBANKENTREPÔTENTREPRENEUREX-GRATIAFILZFORCE MAJEUREGEISHAGENSAKIGESELLSCHAFT MIT BESCHRÄNKTER HAFTUNGGHARARGYOSEI SHIDOHALALHARAAMHAUSBANKHYPOTHEKEN PFANDBRIEFEIJARAITAYOSEKABUSHIKI KAISHIKEIDANREN

Summary of Colloquialisms, Foreign Terms, Acronyms xxiii

KEIRETSULAISSEZ-FAIRELETTRES DE GAGEMOCHIAIMUDARABAMURABAHAMUSHARAKANAAMLOZE VENNOOTSCHAPNIPPON KEIDANRENNOSTRONOYAU DUROBLIGATIONS FONCIERESOFFENTLICHE PFANDBRIEFEPARI PASSUPER PROPFANDBRIEFEPRIMA FACIEPRO RATARENTESRIBASALAMSAMURAISCHATZSCHATZWECHSELSCHULDSCHEINSHIBOSAISHIKKO YAKUINSHOGUNSHOKENSOCIEDAD ANONIMASOCIETA A RESPONSABILITA LIMITATASOCIETA PER AZIONISOCIETE ANONYMESUKUKTOKKINTRANCHEUBERRIMAE FIDEIULTRA VIRESVIS MAJORVORSTANDVOSTROZAIBATSUZAITECH

xxiv

Abbreviations

AAU ASSIGNED AMOUNT UNITAB AKTIEBOLAGABA AMERICAN BANKERS ASSOCIATIONABCP ASSET-BACKED COMMERCIAL PAPERABS ASSET-BACKED SECURITYACCA ASSOCIATION OF CHARTERED CERTIFIED ACCOUNTANTSACH AUTOMATIC CLEARINGHOUSEADR AMERICAN DEPOSITORY RECEIPTADS AMERICAN DEPOSITORY SHAREAFS AVAILABLE FOR SALEAG AKTIENGESELLESCHAFTAGM ANNUAL GENERAL MEETINGAIM ALTERNATIVE INVESTMENT MARKETALCO ASSET LIABILITY COMMITTEEALM ASSET-LIABILITY MANAGEMENTAMEX AMERICAN STOCK EXCHANGEAPACS ASSOCIATION FOR PAYMENT CLEARING SERVICESAPR ANNUAL PERCENTAGE RATEAPT ARBITRAGE PRICING THEORYARCH AUTOREGRESSIVE CONDITIONAL HETEROSCEDASTICITYARM ADJUSTABLE RATE MORTGAGEASB ACCOUNTING STANDARDS BOARDASEAN ASSOCIATION OF SOUTH EAST ASIAN NATIONSATM AUTOMATED TELLER MACHINEATS ALTERNATIVE TRADING SYSTEMB2B EXCHANGE BUSINESS-TO-BUSINESS EXCHANGEB2C EXCHANGE BUSINESS-TO-CONSUMER EXCHANGEBA BANKER’S ACCEPTANCEBACS BANKERS AUTOMATED CLEARING SYSTEMBAFIN BUNDESANSTALT FUR FINANZDIENSTLEISTUNGSAUFSICHTBBA BRITISH BANKERS ASSOCIATIONBBA RATE BRITISH BANKERS ASSOCIATION RATEBOJ BANK OF JAPANBTF BLOCK TRADING FACILITYBV BESLOTEN VENNOOTSCHAPCA CHARTERED ACCOUNTANTCAD III CAPITAL ADEQUACY DIRECTIVE IIICATS CERTIFICATE OF ACCURAL ON TREASURY SECURITIESCBO COLLATERALIZED BOND OBLIGATION

Abbreviations xxv

CCA CHARTERED CERTIFIED ACCOUNTANTCD CERTIFICATE OF DEPOSITCDO COLLATERALIZED DEBT OBLIGATIONCDS CREDIT DEFAULT SWAPCEO CHIEF EXECUTIVE OFFICERCESR COMMITTEE OF EUROPEAN SECURITIES REGULATORSCFA CHARTERED FINANCIAL ANALYSTCFD CONTRACT FOR DIFFERENCESCFO CHIEF FINANCIAL OFFICERCFTC COMMODITY FUTURES TRADING COMMISSIONCGS COST OF GOODS SOLDCHAPS CLEARINGHOUSE AUTOMATED PAYMENT SYSTEMCHIPS CLEARINGHOUSE INTERBANK PAYMENT SYSTEMCIF COST, INSURANCE, FREIGHTCIN CUSIP INTERNATIONAL NUMBERCLO COLLATERALIZED LOAN OBLIGATIONCMBS COMMERCIAL MORTGAGE BACKED SECURITYCME CHICAGO MERCANTILE EXCHANGECMO COLLATERALIZED MORTGAGE OBLIGATIONCMS CONSTANT MATURITY SWAPCMT CONSTANT MATURITY TREASURYCOD CASH ON DELIVERYCONSOB COMMISSIONE NAZIONALE PER LA SOCIETA E LA

BORSACP COMMERCIAL PAPERCPA CERTIFIED PUBLIC ACCOUNTANTCPI CONSUMER PRICE INDEXCPDO CONSTANT PROPORTION DEBT OBLIGATIONCPPI CONSTANT PROPORTION PORTFOLIO INSURANCECPR CONDITIONAL PREPAYMENT RATECSA CREDIT SUPPORT ANNEXCTA COMMODITY TRADING ADVISORCTD CHEAPEST-TO-DELIVERCUSIP COMMITTEE ON UNIFORM SECURITIES IDENTIFICATION

PROCEDURESD&O COVER DIRECTORS’ AND OFFICERS’ INSURANCE COVERDAC/RAP DELIVER AGAINST CASH/RECEIVE AGAINST PAYMENTDAX DEUTSCHE AKTIENINDEXDCF DISCOUNTED CASH FLOWDIE DESIGNATED INVESTMENT EXCHANGEDIP FINANCING DEBTOR-IN-POSSESSION FINANCINGDJIA DOW JONES INDUSTRIAL AVERAGEDMA DIRECT MARKET ACCESSDOT DESIGNATED ORDER TURNAROUND

xxvi Abbreviations

DPC DERIVATIVE PRODUCT COMPANYDPO DIRECT PUBLIC OFFERINGDTCC DEPOSITORY TRUST AND CLEARING CORPORATIONDVP DELIVERY VERSUS PAYMENTEAD EXPOSURE AT DEFAULTEAR EFFECTIVE ANNUAL RATEEBIT EARNINGS BEFORE INTEREST AND TAXESEBITDA EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND

AMORTIZATIONEBRD EUROPEAN BANK FOR RECONSTRUCTION AND

DEVELOPMENTECB EUROPEAN CENTRAL BANKECD EURO CERTIFICATE OF DEPOSITECN ELECTRONIC COMMUNICATIONS NETWORKECP EURO COMMERCIAL PAPERECU EUROPEAN CURRENCY UNITEDF EUROPEAN DEVELOPMENT FUNDEDI ELECTRONIC DATA INTERCHANGEEDS EQUITY DEFAULT SWAPEEA EUROPEAN ECONOMIC AREA EEC EUROPEAN ECONOMIC COMMUNITYEFP EXCHANGE FOR PHYSICALEFT ELECTRONIC FUNDS TRANSFEREFTA EUROPEAN FREE TRADE ASSOCIATIONEIB EUROPEAN INVESTMENT BANKELOB ELECTRONIC LIMIT ORDER BOOKEMS EUROPEAN MONETARY SYSTEMEMTN EURO MEDIUM TERM NOTEEMU EUROPEAN MONETARY UNIONEONIA EURO OVERNIGHT INDEX AVERAGEEPS EARNINGS PER SHAREESOP EMPLOYEE STOCK OWNERSHIP PLANESOT EMPLOYEE SHARE OWNERSHIP TRUSTETF EXCHANGE-TRADED FUNDEU EUROPEAN UNIONEURIBOR EURO INTERBANK OFFERED RATEEURONIA EURO OVERNIGHT INDEX AVERAGEEVA ECONOMIC VALUE ADDEDEVT EXTREME VALUE THEORYEXIMBANK EXPORT IMPORT BANKFASB FINANCIAL ACCOUNTING STANDARDS BOARDFCFE FREE CASH FLOW TO EQUITYFCFF FREE CASH FLOW TO FIRM

Abbreviations xxvii

FCM FUTURES COMMISSION MERCHANTFDIC FEDERAL DEPOSIT INSURANCE CORPORATIONFHLB FEDERAL HOME LOAN BANKSFHLMC FEDERAL HOME LOAN MORTGAGE CORPORATIONFIFO FIRST IN FIRST OUTFNMA FEDERAL NATIONAL MORTGAGE ASSOCIATIONFOB FREE ON BOARDFOF FUND OF FUNDFOMC FEDERAL OPEN MARKETS COMMITTEEFRA FORWARD RATE AGREEMENTFRCD FLOATING RATE CERTIFICATE OF DEPOSITFRN FLOATING RATE NOTEFSA FINANCIAL SERVICES AUTHORITYFTC FEDERAL TRADE COMMISSIONFX FOREIGN EXCHANGEG3 GROUP OF 3G7 GROUP OF 7G8 GROUP OF 8G10 GROUP OF 10GAAP GENERALLY ACCEPTED ACCOUNTING PRINCIPLESGAO GOVERNMENT ACCOUNTABILITY OFFICEGATT GENERAL AGREEMENT ON TARIFFS AND TRADEGC GENERAL COLLATERALGDP GROSS DOMESTIC PRODUCTGDR GLOBAL DEPOSITORY RECEIPTGDS GLOBAL DEPOSITORY SHAREGEMM GILT-EDGED MARKET MAKERGIB GUARANTEED INCOME BONDGMBH GESELLSCHAFT MIT BESCHRÄNKTER HAFTUNGGMRA GLOBAL MASTER REPURCHASE AGREEMENTGNMA GOVERNMENT NATIONAL MORTGAGE ASSOCIATIONGNP GROSS NATIONAL PRODUCTGO BOND GENERAL OBLIGATION BONDGP GENERAL PARTNERSHIPGPM GRADUATED PAYMENT MORTGAGEGSE GOVERNMENT-SPONSORED ENTERPRISEHICP HARMONIZED INDEX OF CONSUMER PRICESHKSE HONG KONG STOCK EXCHANGEHLT LOAN HIGHLY LEVERAGED TRANSACTION LOANHSI HANG SENG INDEXIAS INTERNATIONAL ACCOUNTING STANDARDSIASB INTERNATIONAL ACCOUNTING STANDARDS BOARDIBF INTERNATIONAL BANKING FACILITY

IBNR INCURRED BUT NOT REPORTEDIBRD INTERNATIONAL BANK FOR RECONSTRUCTION AND

DEVELOPMENTICAAP INTERNAL CAPITAL ADEQUACY ASSESSMENT PROCESSICE INTERCONTINENTAL EXCHANGEIDB INTER-DEALER BROKERIDR INTERNATIONAL DEPOSITORY RECEIPTIFC INTERNATIONAL FINANCE CORPORATIONIFRS INTERNATIONAL FINANCIAL REPORTING STANDARDSILS INSURANCE-LINKED SECURITYIMF INTERNATIONAL MONETARY FUNDINC INCORPORATEDIO INTEREST-ONLY STRIPIOI INDICATION OF INTERESTIOSCO INTERNATIONAL ORGANIZATION OF SECURITIES

COMMISSIONSIPO INITIAL PUBLIC OFFERINGIRA INDIVIDUAL RETIREMENT ACCOUNTIRB APPROACH INTERNAL RATINGS-BASED APPROACHIRR INTERNAL RATE OF RETURNIRS INTERNAL REVENUE SERVICEISA INDIVIDUAL SAVINGS ACCOUNTISDA INTERNATIONAL SWAPS AND DERIVATIVES

ASSOCIATIONISIN INTERNATIONAL SECURITIES IDENTIFICATION NUMBERISMA INTERNATIONAL SECURITIES MARKETS ASSOCIATIONJGB JAPANESE GOVERNMENT BONDJV JOINT VENTUREKK KABUSHIKI KAISHILBO LEVERAGED BUYOUTLDC LESSER DEVELOPED COUNTRYLEAPS LONG-TERM EQUITY APPRECIATION SECURITYLEPO LOW EXERCISE PRICE OPTIONLGD LOSS GIVEN DEFAULTLIBID LONDON INTERBANK BIDLIBOR LONDON INTERBANK OFFERED RATELIFO LAST IN FIRST OUTLIMEAN LONDON INTERBANK MEANLLC LIMITED LIABILITY COMPANYLLP LIMITED LIABILITY PARTNERSHIPLP LIMITED PARTNERSHIPLSE LONDON STOCK EXCHANGELTD LIMITEDLTPR LONG-TERM PRIME RATE

xxviii Abbreviations

Abbreviations xxix

LTV LOAN-TO-VALUEM&A MERGERS and ACQUISITIONSMAC MATERIAL ADVERSE CHANGE CLAUSEMAS MONETARY AUTHORITY OF SINGAPOREMBO MANAGEMENT BUYOUTMBS MORTGAGE-BACKED SECURITYMETI MINISTRY OF ECONOMY, TRADE, AND INDUSTRYMFN MOST FAVORED NATIONMIFID MARKETS IN FINANCIAL INSTRUMENTS DIRECTIVEMLP MASTER LIMITED PARTNERSHIPMNC MULTINATIONAL CORPORATIONMOB SPREAD MUNICIPALS OVER BONDS SPREADMOF MULTIPLE OPTION FACILITYMOS MUTUAL OFFSET SYSTEMMPC MONETARY POLICY COMMITTEEMPT MODERN PORTFOLIO THEORYMTN MEDIUM-TERM NOTEN.A. NATIONAL ASSOCIATIONNAFTA NORTH AMERICAN FREE TRADE AGREEMENTNASD NATIONAL ASSOCIATION OF SECURITIES DEALERSNASDAQ NATIONAL ASSOCIATION OF SECURITIES DEALERS

AUTOMATED QUOTATIONSNAV NET ASSET VALUENBBO NATIONAL BEST BID OFFERNCD NEGOTIABLE CERTIFICATE OF DEPOSITNGO NONGOVERNMENTAL ORGANIZATIONNIC NEWLY INDUSTRIALIZED COUNTRYNIF NOTE ISSUANCE FACILITYNMS NATIONAL MARKET SYSTEMNNP NET NATIONAL PRODUCTNOPAT NET OPERATING PROFIT AFTER TAXNPV NET PRESENT VALUENV NAAMLOZE VENNOTSCHAPNYSE NEW YORK STOCK EXCHANGEOAS OPTION-ADJUSTED SPREADOECD ORGANIZATION FOR ECONOMIC COOPERATION AND

DEVELOPMENTOID ORIGINAL ISSUE DISCOUNTOIS OVERNIGHT INDEX SWAPOPEC ORGANIZATION OF PETROLEUM EXPORTING COUNTRIESOPIC OVERSEAS PRIVATE INVESTMENT CORPORATIONOSE OSAKA STOCK EXCHANGEOTC OVER-THE-COUNTERP/E PRICE/EARNINGS

xxx Abbreviations

PAC BOND PLANNED AMORTIZATION CLASS BONDPAYE PAY AS YOU EARNPBOC PEOPLE’S BANK OF CHINAPD PROBABILITY OF DEFAULTPIPE PRIVATE INVESTMENT IN PUBLIC EQUITYPLC PUBLIC LIMITED COMPANYPPI PRODUCER PRICE INDEXQFII QUALIFIED FOREIGN INSTITUTIONAL INVESTORQIB QUALIFIED INSTITUTIONAL BUYERQT QUESTIONED TRADERAROC RISK-ADJUSTED RETURN ON CAPITALRBA RESERVE BANK OF AUSTRALIAREIT REAL ESTATE INVESTMENT TRUSTREMIC REAL ESTATE MORTGAGE INVESTMENT CONDUITRFP REQUEST FOR PROPOSALROA RETURN ON ASSETSROE RETURN ON EQUITYROI RETURN ON INVESTMENTRPI RETAIL PRICE INDEXRUF REVOLVING UNDERWRITING FACILITYRWA RISK WEIGHTED ASSETSS&L SAVINGS AND LOANS&P 500 STANDARD AND POOR’S 500SA SOCIETE ANONYME, SOCIEDAD ANONIMASDR SPECIAL DRAWING RIGHTSSEAQ STOCK EXCHANGE AUOMATED QUOTATIONSSEATS STOCK EXCHANGE ALTERNATIVE TRADING SERVICESEC SECURITIES AND EXCHANGE COMMISSIONSEDOL STOCK EXCHANGE DAILY OFFICIAL LISTSETS STOCK EXCHANGE TRADING SYSTEMSIFMA SECURITIES INDUSTRY AND FINANCIAL MARKETS

ASSOCIATIONSIPC SECURITIES INVESTOR PROTECTION CORPORATIONSIV STRUCTURED INVESTMENT VEHICLESNIF STANDBY NOTE ISSUANCE FACILITYSOES SMALL ORDER EXECUTION SYSTEMSONIA STERLING OVERNIGHT INDEX AVERAGESOR SMART ORDER ROUTERSpA SOCIETA PER AZIONISPE SPECIAL-PURPOSE ENTITYSPV SPECIAL-PURPOSE VEHICLESrL SOCIETA A RESPONSABILITA LIMITATASRO SELF-REGULATORY ORGANIZATIONSSE SHANGHAI STOCK EXCHANGE

Abbreviations xxxi

STAGS STERLING TRANSFER ACCURING GOVERNMENT SECURITYSTRIPS SEPARATE TRADING OF REGISTERED INTERST AND PRINCIPAL

SECURITIESSWF SOVEREIGN WEALTH FUNDTAC BOND TARGETED AMORTIZATION CLASS BONDTBA TO BE ANNOUNCEDTERP THEORETICAL EX-RIGHTS PRICETIBOR TOKYO INTERBANK OFFERED RATETIGR TREAUSRY INVESTORS GROWTH RECEIPTTIPS TREASURY INFLATION-PROTECTED SECURITYTOPIX TOKYO STOCK PRICE INDEXTRIN TRADING INDEXTSE TOKYO STOCK EXCHANGETWAP TIME WEIGHTED AVERAGE PRICEVAR VALUE-AT-RISKVAT VALUE ADDED TAXVIE VARIABLE INTEREST ENTITYVIX VOLATILITY INDEXVRCD VARIABLE RATE CERTIFICATE OF DEPOSITVRN VARIABLE RATE NOTEVWAP VOLUME WEIGHTED AVERAGE PRICEWAC WEIGHTED AVERAGE COUPONWACC WEIGHTED AVERAGE COST OF CAPITALWI WHEN-ISSUEDWIT WHEN-ISSUED TREASURYWMBA WHOLESALE MARKETS BROKERS ASSOCIATIONWTO WORLD TRADE ORGANIZATIONXD EX-DIVIDENDXOL AGREEMENT EXCESS OF LOSS AGREEMENTXR EX-RIGHTSXW EX-WARRANT