Financial Risk Manager

Ways of Financial and Risk Management

Financial and Business Terms - from Bus to Buy
Monday, May 25, 2009

Business cycle: Repetitive cycles of economic expansion and recession.
Business failure: A business that has terminated with a loss to creditors.
Business risk: The risk that the cash flow of an issuer will be impaired because of adverse economic conditions, making it difficult for the issuer to meet its operating expenses.
Butterfly shift: A non-parallel shift in the yield curve involving the height of the curve.
Buy: To purchase an asset; taking a long position.
Buy in: To cover, offset or close out a short position. Related: evening up, liquidation.
Buy limit order: A conditional trading order that indicates a security may be purchased only at the designated price or lower. Related: Sell limit order.
Buy on close: To buy at the end of the trading session at a price within the closing range.
Buy on margin: A transaction in which an investor borrows to buy additional shares, using the shares themselves as collateral.
Buy on opening: To buy at the beginning of a trading session at a price within the opening range.
Buy-and-hold strategy: A passive investment strategy with no active buying and selling of stocks from the time the portfolio is created until the end of the investment horizon.
Buydowns: Mortgages in which monthly payments consist of principal and interest, with portions of these payments during the early period of the loan being provided by a third party to reduce the borrower's monthly payments.
Buying the index: Purchasing the stocks in the S&P 500 in the same proportion as the index to achieve the same return.
Buyout: Purchase of a controlling interest (or percent of shares) of a company's stock. A leveraged buy-out is done with borrowed money.
Buy-back: Another term for a repo.
Buy-side analyst: A financial analyst employed by a non-brokerage firm, typically one of the larger money management firms that purchase securities on their own accounts.