Forward Curve
What is the Forward Curve? The forward curve or the future curve is the graphical representation of the relationship between the price of forward contracts and the time to maturity of the contracts. The vertical axis measures the price of a forward contract, and the horizontal axis measures the time to maturity of that forward...
Accredited Investor
What is an Accredited Investor? An accredited investor refers to an individual or institutional investor who has met certain requirements set by the U.S. Securities and Exchange Commission (SEC). Accredited investors are allowed to purchase securities that are not available to other investors and that have not been registered with any regulatory authority. The SEC...
Hybrid Securities
What are Hybrid Securities? Hybrid securities are investment instruments that combine the features of pure equities and pure bonds. These securities tend to offer a higher return than pure fixed income securities such as bonds but a lower return than pure variable income securities such as equities. They are considered less riskier than pure variable...
Fairly Valued Security
What is a Fairly Valued Security? A security is said to be fairly valued if its market price is equal to its true value. Since the true value of a security is usually not known, the question of whether a security is fairly valued lacks a definite answer. Most securities are valued using some variation...
Swaption
What is a Swaption? A swaption (also known as a swap option) is an option contract that grants its holder the right but not the obligation to enter into a predetermined swap contract. In return for the right, the holder of the swaption must pay a premium to the issuer of the contract. Swaptions typically...
