Definitions Essay Example | Topics and Well Written Essays - 500 words

Definitions - Essay ExampleFinancial System - system that enables bump off of money between savers or investors/lenders and borrowers and may also pertain to the set of implemented procedures that track the financial activities of the company.Diversification - a risk management technique that mixes a wide variety of investments within a portfolio and strives to smooth out unsystematic risk events in a portfolio so that the positive performance of well-nigh investments will neutralize the negative performance of others.Repurchase Agreement - (repo for short) is a type of short-term loan much used in the money markets, whereby the vendor of a security agrees to buy it back at a specified price and time the seller pays an interest rate, called the repo rate, when buying back the securities.US treasury Security - government debtissued by theUnited States Department of the Treasurythrough theBureau of the Public Debt treasurysecurities ar thedebtfinancing instruments of theUnited Sta tes federal government, and they are often referred to simply asTreasuries.OTC Markets - decentralized (Over-The-Counter) markets of securities not listed on an exchange where market participants trade over the telephone, facsimile or electronic electronic network instead of a physical trading floor.Adverse Selection - also called anti-selection or negative selection refers to a market process in which questioning results occur when buyers and sellers haveasymmetric information(i.e. access to different information) the bad products or services are more likely to be selected.Moral punt - The risk that a party to a transaction has not entered intothe contract in good faith, has provided misleading information about its assets, liabilities or credit capacity, or has an incentive to take unusual risks in a desperate attempt to earn a profit before the contract settles.Money - a average that can be