What is a Call Premium? A call premium refers to the amount above par value an investor receives when the debt issuer redeems the security earlier than its maturity date. If a security is redeemed before it reaches maturity, the owner of the security loses the incremental profits that would’ve been generated. The call premium…
What is the Calmar Ratio? The Calmar ratio is a formula that measures the performance of an investment fund – such as a hedge fund – compared to its risk. It is commonly used by investors as a risk-adjusted measure in the selection of investments. The Calmar ratio indicates the relationship between risk and return….
What is the Call Market? The call market refers to a market where trading does not take place continuously, but only at specified times during the trading day. Prices are dictated by the exchange rather than by bids and offers. In the call market, orders are aggregated and collected at designated intervals instead of trading…
What are Forfeited Shares? Forfeited shares often result from when investors in equity shares fail to comply with pre-specified purchase agreements or restrictions. The end result of share forfeiture is that the shareholder no longer needs to comply with the pre-specified purchase agreement or restrictions but loses the opportunity to realize gains on their equity…
What is the Negative Volume Index (NVI)? The Negative Volume Index (NVI) is a technical indicator used to identify trends in a market. It is a cumulative indicator, which means that all changes to the indicator accumulate. Put another way, the values used in the indicator in the current period will be used in future…
What is Foreign Portfolio Investment (FPI)? Foreign portfolio investment (FPI) involves an investor purchasing foreign financial assets. The transaction of foreign securities generally occurs at an organized formal securities exchange or through an over-the-counter market transaction. Foreign portfolio investment is becoming increasingly more common as a means of portfolio diversification. Often, FPIs consist of securities…
What is a Vostro Account? A Vostro account is part of correspondent banking where a foreign bank holds the funds and acts as an intermediary to those funds. The account is held on behalf of a domestic bank that manages and supervises the funds. The domestic bank will approach the international correspondent bank to open…
What is a Voluntary Trust? A voluntary trust is a fiduciary relationship between a trustor, trustee, and a beneficiary used for estate planning over an individual’s lifetime. A voluntary trust is also known as a living trust, and its lifetime is set at the time of creation to meet both parties’ needs as they see…
