Financial definitions for business owners L

• Definition Late charge Explain A fee a credit grantor charges a borrower for a late payment
• Definition Low price Explain The day's lowest price of a security that has changed hands between a buyer and a seller
• Definition Listed firm Explain A company whose stock trades on a stock exchange, and conforms to listing requirements
• Definition Listed option Explain An option that has been accepted for trading on an exchange
• Definition Low price-earnings ratio effect Explain The tendency of portfolios of stocks with a low price-earnings ratio to outperform portfolios of stocks with high price-earnings ratios
• Definition Limited partnership Explain A partnership that includes one or more partners who have limited liability
• Definition Listing broker In the context of equity, when a stock is traded in exchange it is said to be listed Explain A licensed real estate broker who completes a listing of a property for sale
• Definition Long coupons Explain maturity. (2) A bond on which one of the coupon periods, usually the first, is longer than the other periods or the standard period
• Definition Long hedge Explain anticipation of actual purchases in the cash market. Used by processors or exporters as protection against an advance in the cash price
• Definition Long leg Explain The part of an option spread in which an agreement to buy the underlying security is made
• Definition Long position Explain number of contracts bought exceeds the number of contracts sold). For equities, a long position occurs when an individual owns securities
• Definition Long run Explain A period of time in which all costs are variable; longer than one year
• Definition Long straddle Explain Taking a long position in both a put and a call option
• Definition Long-term Explain In accounting terms, one year or longer
• Definition Long-term assets Explain capital assets minus the depreciation. This is an entry in the bookkeeping records of a company. It is usually established on a cost basis
• Definition Long-term debt Explain An obligation having a maturity of more than one year from the date it was issued. Also called funded debt
• Definition Long-term debt/capitalization Explain long-term debt as a proportion of the capital available. Determined by dividing long-term debt by the sum of long-term debt, preferred
• Definition Long-term debt-to-equity ratio Explain A capitalization ratio comparing long-term debt to shareholders' equity
• Definition Long-term debt ratio Explain The ratio of long-term debt to total capitalization
• Definition Long-term financial plan Explain Financial plan covering two or more years of future operations
• Definition Long-term financing Explain Liabilities repayable in more than one year plus equity
• Definition Long-term gain Explain A profit on the sale of a capital assets held longer than 12 months, and eligible for long-term capital gains tax treatment
• Definition Long-term goals Explain Financial goals expected to be accomplished in five years or longer
• Definition Long-term investor Explain A person who makes investments for a period of at least five years in order to finance his or her long-term goals
• Definition Long-term liabilities Explain Amount owed for leases, bond repayment, and other items due after 1 year
• Definition Long-term loss Explain A loss on the sale of a capital asset held less than 12 months that can be used to offset a capital gain
• Definition Look-thru Explain A method for calculating U.S. taxes owed on income from controlled foreign corporations that was introduced by the Tax Reform Act of 1986
• Definition Lookback option Explain choose as the option strike price any price of the underlying asset that has occurred during the life of the option. For a call option, the
• Definition Looking for Explain this describing a buy interest in which a dealer is asked to offer stock, often involving a capital commitment. Antithesis of in touch with
• Definition Loophole Explain regulation that makes it possible to avoid certain consequences or circumvent a rule without breaking the law, such as in the use of a tax
• Definition Loose credit Explain make loans less expensive and more available by reducing interest rates through open market operations
• Definition Loss Explain The opposite of profit
• Definition Loss-control activities Explain Actions that an insured person or company takes at the instigation of an insurance company in order to prevent accidents or losses
• Definition Loss-of-income insurance Explain Insurance coverage that will pay out income that a policyholder loses as a result of a disability, injury, or business disruption
• Definition Loss ratio Explain The ratio of losses paid or accrued by an insurer to premiums collected over a year
• Definition Lots Explain this blocks or portions of trades. Can express a specific transaction in a stock at a certain time, often implying execution at the same
• Definition Low Explain this is a specific minimum limit required by a seller in execution an order ( I'll sell 50 with an eighth low. ); implies a not-held
• Definition Low balance method Explain A method of calculating interest on the basis of the lowest balance of an account over the applicable period
• Definition Low ball Explain Slang for making an offer well below the fair value of an asset in hopes that the seller may be desperate to sell
• Definition Low-coupon bond refunding Explain Refunding of a low-coupon bond with a new, higher-coupon bond
• Definition Low grade Explain A bond with a rating of B or lower
• Definition Listing requirements Explain outstanding, market value, and income, that are laid down by an exchange for any stock to be listed for trading
• Definition Living benefits Explain Life insurance benefits from which the insured can draw cash while still living, usually in the case of some high-cost illness
• Definition Lloyds of London Explain A marketplace in London for underwriting syndicates
• Definition Load fund Explain sales charge-typically 4% to 8% of the net amount indicated. Some no-load funds also levy distribution fees permitted by Article 12b-1 of
• Definition Load-to-load Explain Arrangement whereby the customer pays for the last delivery when the next one is received
• Definition Load spread option Explain charge on load funds, often through percentage deductions from a customer's periodic fixed payments
• Definition Loan Explain Temporary borrowing of a sum of money. If you borrow $1 million you have taken out a loan for $1 million
• Definition Loan amortization schedule Explain The timetable for repaying the interest and principal on a loan
• Definition Loan commitment Explain Assurance by a lender to make money available to a borrower on specific terms in return for a fee
• Definition Loan crowd Explain The group of member firms that lend or borrow securities needed to cover the positions of customers who have sold short securities
• Definition Loaned flat Explain Securities lent interest-free between brokers to cover customers' short sale positions
• Definition Loan value Explain securities that a broker can lend to a margin account customer, as dictated by the Federal Reserve Board in Regulation T
• Definition Local Explain A futures exchange member who trades securities for his or her own account
• Definition Local expectations theory Explain that suggests that the returns on bonds of different maturities will be the same over a short-term investment horizon
• Definition Local taxes Explain Property, sewer, school, or other community paid to a locality. Local taxes are usually deductible for federal income tax purposes
• Definition Lock Explain Make a market both ways (bid and offer) either on the bid, offering, or an in-between price only. Locking on the offering occurs to
• Definition Lock in Explain all his or her business with a sole broker by providing superior services, such as accommodating block buy and sell needs or preparing
• Definition Lock-out Explain before the PAC sinking fund becomes effective. With multifamily loans, the period of time during which prepayment is prohibited
• Definition Lock-up CDs Explain understanding that the buyer will not trade the certificate. Quite often, the issuing bank will insist that it hold the certificate for
• Definition Locked market Explain equals the ask price. This can occur, for example, if the market is brokered and one side pays brokerage only, in over-the-counter trading
• Definition Lockbox Explain provided to firms by banks, which collect payments from a dedicated postal box to which the firm directs its customers to send payment to
• Definition Locked in Explain advantage of preferential tax treatment because of time remaining on a required holding period. Also, a commodities position in which the
• Definition Log-linear least-squares method Explain curve to a set of data points. One of the variables is transformed by taking its logarithm, and then a straight line is fitted to the
• Definition Lognormal distribution Explain which the logarithm of the variable follows a normal distribution. Lognormal distributions are used to describe returns calculated over
• Definition Lombard rate Explain equities. Interest rate the German Bundesbank uses as an upper limit to the day-to-day money rate, since no bank will pay higher rates in
• Definition London Commodity Exchange (LCE) Explain Merged with the London International Financial Futures and Options Exchange in 1996
• Definition London Metal Exchange (LME) Explain A market for trading base metals, where traded options contracts are available against the underlying futures contract
• Definition London Stock Exchange (LSE) Explain joined together in 1973 to form the stock exchange of Great Britain and Ireland, later named the LSE. The FTSE 100 index (known as the
• Definition Long Explain establish a market position and who has not yet closed out this position through an offsetting sale; the opposite of short
• Definition Long bonds Explain Bonds with a long current maturity. The long bond is the 30-year U.S. Treasury bond
• Definition Limited risk Explain which is much lower than that of a futures contract, which has unlimited risk. The maximum loss in buying a call option, for example, is
• Definition Limit price\. Limit order information systemThe electronic system supplying information about securities traded on participating exchanges so that the best securities prices can be found\. These orders are treated equally with other orders in terms of priority of execution\. Limit order book A record of unexecuted limit orders maintained by the specialist\. A conditional trading order designed to avoid the danger of adverse unexpected price changes\. For instance, you could tell a broker "buy me 100 shares of XYZ Corp at $8 or less" or "sell 100 shares of XYZ at $10 or better" The customer specifies a price, and the order can be executed only if the market reaches or betters that price\. Limit order An order to buy a stock at or below a specified price, or to sell a stock at or above a specified price Explain See: Maximum price fluctuation
• Definition Limited-tax general obligation bond Explain A general obligation bond of a government backed by specified or constrained revenue sources
• Definition Limited warranty Explain limitations on the parts covered, type of damage covered, and/or time period for which the agreement is good
• Definition Line of credit Explain An informal loan arrangement between a bank and a customer allowing the customer to borrow up to a prespecified amount
• Definition Linear programming Explain Technique for finding the maximum value of some equation, subject to stated linear constraints
• Definition Linear regression Explain A statistical technique for fitting a straight line to a set of data points
• Definition Lintner's observations Explain suggests that dividend policy is related both a target level, and to the speed of adjustment of change in dividends
• Definition Lipper Mutual Fund Industry Average Explain The average level of performance for all mutual funds, as reported by Lipper Analytical Services
• Definition Liquid asset Explain Asset that is easily and cheaply turned into cash-notably, cash itself and short-term securities
• Definition Liquidating dividend Explain Payment by a firm to its owners from capital rather than from earnings
• Definition Liquidation Explain terminated. Assets are sold, proceeds are used to pay creditors, and any leftovers are distributed to shareholders. Any transaction that
• Definition Liquidation rights Explain The rights of a firm's securityholders in the event the firm liquidates
• Definition Liquidation value Explain Net amount that could be realized by selling the assets of a firm after paying the debt
• Definition Liquidator Explain creditor in the United Kingdom to oversee the sale of an insolvent firm's assets and the repayment of its debts
• Definition Liquidity Explain allowing buying and selling with minimum price disturbance. Also, a market characterized by the ability to buy and sell with relative ease
• Definition Liquidity diversification Explain Investing in a variety of maturities to reduce the price risk to which holding long bonds exposes the investor
• Definition Liquidity Fund Explain estate limited partnership interests at 25% to 35% lower than the current value of the real estate assets
• Definition Liquidity preference hypothesis Explain valuable, all else equal. Also, the theory that the forward rate exceeds expected future interest rates
• Definition Liquidity premium Explain Forward rate minus expected future short-term interest rate
• Definition Liquidity ratios Explain ability to meet its short-term financial obligations on time, such as the ratio of current assets to current liabilities
• Definition Liquidity risk Explain difficulty of selling an asset in a timely manner. It can be thought of as the difference between the true value of the asset and the
• Definition Liquidity theory of the term structure Explain asserts that the implied forward rates will not be a pure estimate of the market's expectations of future interest rates because they
• Definition Lisbon Stock Exchange (LSE) Explain Stock exchange trading stocks, bonds, and unit trusts. The BVL general index is the exchange's official index
• Definition Listed security Explain for trading by one of the organized and registered securities exchanges in the United States. Generally, the advantages of being listed are
• Definition Listed stocks Explain Stocks that are traded on an exchange
• Definition Listing requirements\. A licensed real estate broker who completes a listing of a property for sale\. Listing broker In the context of equity, when a stock is traded in exchange it is said to be listed Explain outstanding, market value, and income, that are laid down by an exchange for any stock to be listed for trading
• Definition Liability Explain A financial obligation, or the cash outlay that must be made at a specific time to satisfy the contractual terms of such an obligation
• Definition Liability funding strategies Explain Investment strategies that select assets so that cash flows will equal or exceed the client's obligations
• Definition Liability insurance Explain Insurance guarding against damage or loss that the policyholder, may cause another person in the form of bodily injury or property damage
• Definition Liability swap Explain cash flow characteristics of an institution's liabilities so as to provide a better match with its assets
• Definition Lien Explain A security interest in one or more assets that lenders hold in exchange for secured debt financing
• Definition Life annuity Explain An annuity that pays a fixed amount for the lifetime of the annuitant
• Definition Life cycle Explain The lifetime of a product or business, from its creation to its demise or transformation
• Definition Life expectancy Explain person is expected to live, which is used by insurance companies use to make projections of benefit payouts
• Definition Life insurance Explain An insurance policy that pays a monetary benefit to the insured person's survivors after death
• Definition Life insurance in force Explain The dollar amount of life insurance that a company has issued, measured as the sum of policy face values and dividends paid
• Definition Life insurance policy Explain The contract that sets out the terms of life insurance coverage
• Definition Lifetime reverse mortgage Explain borrows against the value a home, while retaining title, and making no payments while residing in the home. When the owner ceases living
• Definition Lift Explain An increase in securities prices, as shown by some economic indicator
• Definition Lifted Explain Refers to over-the-counter trading. Having an offer taken in a stock, followed by the market maker raising the offer price
• Definition Lighten up Explain Selling some part of a stock or bond position in a portfolio to realize capital gains or to losses or increase cash assets
• Definition Limit on close order Explain An order to buy or sell stock at the closing price only if the price is at a predetermined level or better
• Definition Limit order Explain specified price, or to sell a stock at or above a specified price. For instance, you could tell a broker buy me 100 shares of XYZ Corp at $
• Definition Limit order book Explain maintained by the specialist. These orders are treated equally with other orders in terms of priority of execution
• Definition Limit order information system Explain information about securities traded on participating exchanges so that the best securities prices can be found
• Definition Liquidity ratios\. Liquidity premiumForward rate minus expected future short-term interest rate\. Also, the theory that the forward rate exceeds expected future interest rates\. Liquidity preference hypothesisThe argument that greater liquidity is valuable, all else equal\. Liquidity FundA California company that buys real estate limited partnership interests at 25% to 35% lower than the current value of the real estate assets\. Liquidity diversificationInvesting in a variety of maturities to reduce the price risk to which holding long bonds exposes the investor\. Antithesis of illiquidity\. Also, a market characterized by the ability to buy and sell with relative ease\. Liquidity A high level of trading activity, allowing buying and selling with minimum price disturbance Explain ability to meet its short-term financial obligations on time, such as the ratio of current assets to current liabilities
• Definition Limit up, limit down Explain The maximum price change allowed for a commodity futures contract per trading day
• Definition Limitation on asset dispositions Explain A bond covenant that restricts in some way a firm's ability to sell major assets
• Definition Limitation on liens Explain A bond covenant that restricts in some way a firm's ability to grant liens on its assets
• Definition Limitation on merger, consolidation, or sale Explain A bond covenant that restricts in some way a firm's ability to merge or consolidate with another firm
• Definition Limitation on sale-and-leaseback Explain way a firm's ability to enter into sale-and-leaseback transactions, financing techniques that could affect creditor thinness
• Definition Limitation on subsidiary borrowing Explain A bond covenant that restricts in some way a firm's ability to borrow at the level of firm subsidiary
• Definition Limited company Explain A form of business commonly used in the U.K. comparable to incorporation in the U.S
• Definition Limited discretion Explain Permission by a client that allows a broker to make certain stock and option trades without first consulting the client about the trade
• Definition Limited liability Explain Limitation of loss to what has already been invested
• Definition Limited-liability instrument Explain A security, such as a call option, in which the owner can lose only the initial investment
• Definition Limited partner Explain A partner who has limited legal liability for the obligations of the partnership
• Definition Limited payment policy Explain Life insurance providing full life protection but requiring premiums for only part of the customer's lifetime
• Definition Legal monopoly Explain A government-regulated firm that is legally entitled to be the only company offering a particular service in a particular area
• Definition Legal opinion Explain A statement, usually written by a specialized law firm, required for a new municipal bond issue stating that the issue is legally acceptable
• Definition Legal transfer Explain A stock transaction that requires special documentation in addition to standard stock or bond power to be legally valid
• Definition Legislative risk Explain The risk that new or changed legislation will have a large positive or negative effect on an investment
• Definition Legitimate Explain Used in the context of general equities. Real interest in trading as compared to a profile stance. See: Natural
• Definition Lemon Explain An investment with poor results
• Definition Lend Explain To provide money temporarily on the condition that it or its equivalent will be returned, often with an interest fee
• Definition Lender Explain Businesses that provide loans to others
• Definition Lender of last resort Explain in the U.S., which assists banks that face large withdrawals of funds and in so doing stabilizes the banking system
• Definition Lending agreement Explain A contract regarding funds transferred between a lender and a borrower
• Definition Lending at a premium Explain securities to cover a customer's short position, with a borrowing fee included. A fee is unusual since securities are normally lent
• Definition Lending at a rate Explain Interest paid to a customer on the credit balance received from a short sale
• Definition Lending securities Explain s inventory, from another customer's margin account, or from another broker, when a customer is required to deliver on a short sale
• Definition Lessee Explain An entity that leases an asset from another entity
• Definition Lessor Explain An entity that leases an asset to another entity
• Definition Letter of comment Explain A communication to the firm from the SEC that suggests changes to its registration statement
• Definition Letter of intent Explain shareholder that a certain amount of money will be invested monthly, in exchange for lower sales charges. In mergers, a preliminary merger
• Definition Letter stock Explain called because the SEC requires a letter from the purchaser stating that the stock is not intended for resale
• Definition Level Explain Used in the context of general equities. Price measure of an indication
• Definition Level-coupon bond Explain Bond with a stream of coupon payments that remain the same throughout the life of the bond
• Definition Level debt service Explain A municipal charter provision that debt payments must be relatively equal from year to year so that required revenue projections are easier
• Definition Level pay Explain payments (P;I) due under a mortgage so that total monthly payment of P;I is the same. different from the typical mortgage for which the
• Definition Level term insurance Explain A life insurance policy with a fixed face value and increasing premiums
• Definition Leverage Explain of rising or falling at a proportionally greater amount than comparable investments. For example, an option is said to have high leverage
• Definition Leverage clientele Explain their personal leverage, seek to invest in corporations that maintain a compatible degree of corporate leverage
• Definition Leverage ratios Explain stockholders, capitalization, and creditors obligations, and of the firm's ability to pay financing charges. Value of firm's debt
• Definition Leverage rebalancing Explain Making transactions to adjust (rebalance) a firm's leverage ratio to a target ratio
• Definition Leveraged beta Explain The beta of a leveraged required return; that is, the beta as adjusted for the degree of leverage in the firm's capital structure
• Definition Leveraged buyout (LBO) Explain corporation private that is financed through debt such as bank loans and bonds. Because of the large amount of debt relative to equity in
• Definition Leveraged company Explain A company that has debt in its capital structure
• Definition Leveraged equity Explain Stock in a firm that relies on financial leverage. Holders of leveraged equity experience the benefits and costs of using debt
• Definition Leveraged investment company Explain entitled to borrow capital for its operations. Also, an investment company that issues both income shares and capital shares
• Definition Leveraged lease Explain lessor borrows a large proportion of the funds needed to purchase the asset. The lender has a lien on the assets and a pledge of the lease
• Definition Leveraged portfolio Explain A portfolio that includes risky assets purchased with funds borrowed
• Definition Leveraged required return Explain The required return on an investment when the investment is financed partially by debt
• Definition Leveraged stock Explain Stocks financed with credit, such as that purchased on a margin account
• Definition Large-cap Explain A stock with a high level of capitalization, usually at least $5 billion market value
• Definition Last sale Explain The most recent trade performed in a security
• Definition Last split Explain After a stock split, the number of shares distributed for each share held and the date of the distribution
• Definition Last trading day Explain rules during which trading may take place in a particular futures or options contract. Contracts outstanding at the end of the last trading
• Definition Late tape Explain on the tape of an exchange because of heavy trading. In severe instances the first digit of each price is intentionally deleted
• Definition Launder Explain To move illegally acquired cash through financial systems so that it appears to be legally acquired
• Definition Law of large numbers Explain The mean of a random sample approaches the mean (expected value) of the population as sample size increases
• Definition Law of one price Explain security must have the same price no matter how the security is created. If the payoff of a security can be synthetically created by a
• Definition Lay off Explain In the context of general equities, this eliminates all or part of a position by finding customers or other dealers to take the position
• Definition Lead pipe Explain Used in the context of general equities. Virtually certain that trade will take place; lead pipe cinch. See: Layup
• Definition Lead Explain Payment of a financial obligation earlier than is expected or required
• Definition Lead manager Explain the primary responsibility for organizing syndicated bank credit or bond issued. The lead manager recruits additional lending or
• Definition Layup Explain Used in the context of general equities. Easily executed trade or order. See: Lead pipe
• Definition Lead regulator Explain A leading self-regulatory organization that over sees compliance with a particular section of the law, such as the NYSE, ASE, or NASDAQ
• Definition Lead underwriter Explain firms that are sponsoring an initial public offering of securities or a secondary offering of securities. Could also apply to bond issues
• Definition Leader Explain A stock or group of stocks that is the first to move in a market upsurge or downturn
• Definition Leading economic indicators Explain Economic series that tend to rise or fall in advance of the rest of the economy
• Definition Leading the market Explain this is a stock or group of stocks moving with the market as a whole, but moving in advance of the general market
• Definition Leakage Explain Release of information selectively or not before official public announcement
• Definition Lease Explain A long-term rental agreement, and a form of secured long-term debt
• Definition Lease acquisition cost Explain The legal fees and other expenses incurred when acquiring a lease
• Definition Leasehold Explain An asset providing the right to use property under a lease agreement
• Definition Leasehold improvement Explain An improvement made to leased property
• Definition Lease-purchase agreement Explain An agreement that allows for portions of lease payments to be used to purchase the leased property
• Definition Lease rate Explain The payment per period stated in a lease contract
• Definition Leaseback Explain some property, and an agreement by the seller to lease the property back from the buyer after the sale
• Definition Leaves Explain Remains to buy or sell of a previously entered order after a report of partial execution has been given. If the floor broker to buy 20M
• Definition Ledger cash Explain A firm's cash balance as reported in its financial statements. Also called book cash
• Definition Lifting a leg Explain Closing out one side of a long-short arbitrage before the other is closed
• Definition Leg up Explain 1)Have a portion of the offsetting side of a trade in your pocket (spoken for) so your capital risk in the transaction is reduced
• Definition LEGAL Explain the NYSE to keep track of enforcement actions, audits, and complaints against member firms. This term is not an acronym but is referred to
• Definition Legal capital Explain Value at which a company's shares are recorded in its books
• Definition Legal bankruptcy Explain A legal proceeding for liquidating or reorganizing a business
• Definition Legal defeasance Explain securities, as specified in the bond indenture, into an irrevocable trust sufficient to enable the issuer to fully discharge its
• Definition Legal entity Explain legally enter into a contract, and may therefore be sued for failure to comply with the terms of the contract
• Definition Legal investments Explain Investments that a regulated entity is permitted to make under the rules and regulations that govern its conduct
• Definition Legal list Explain A list of high-quality debt and equity securities chosen by a state agency that are acceptable holdings for fiduciary institutions
• Definition L Explain specifying that the issue is a class of stock such as third preferred class of warrants, foreign preferred, sixth class of preferred stock
• Definition Lien\. Liability swap An interest rate swap used to alter the cash flow characteristics of an institution's liabilities so as to provide a better match with its assets\. Liability insuranceInsurance guarding against damage or loss that the policyholder, may cause another person in the form of bodily injury or property damage\. Liability funding strategies Investment strategies that select assets so that cash flows will equal or exceed the client's obligations\. Liability A financial obligation, or the cash outlay that must be made at a specific time to satisfy the contractual terms of such an obligation\. Leveraged stockStocks financed with credit, such as that purchased on a margin account\. Leveraged required returnThe required return on an investment when the investment is financed partially by debt\. Popular form of shark repellent See: Stub\. A public company takes on significant additional debt with the purpose of either paying an extraordinary dividend or repurchasing shares, leaving the public shareholders with a continuing interest in a more financially leveraged company\. Leveraged recapitalizationOften used in risk arbitrage\. Leveraged portfolio A portfolio that includes risky assets purchased with funds borrowed\. The lender has a lien on the assets and a pledge of the lease payments to secure the borrowing\. Leveraged leaseA lease arrangement under which the lessor borrows a large proportion of the funds needed to purchase the asset\. Also, an investment company that issues both income shares and capital shares\. Leveraged investment companyAn investment company or mutual fund entitled to borrow capital for its operations\. Holders of leveraged equity experience the benefits and costs of using debt\. Leveraged equityStock in a firm that relies on financial leverage\. Leveraged companyA company that has debt in its capital structure\. fund that specializes in such investments\. O\. B\. , purchase of the bonds or participation in the bank loan) or the purchase of equity through an L\. e\. through either the purchase of the debt (i\. O\. B\. Investors can participate in an L\. Because of the large amount of debt relative to equity in the new corporation, the bonds are typically rated below investment-grade, properly referred to as high-yield bonds or junk bonds\. Leveraged buyout (LBO) A transaction used to take a public corporation private that is financed through debt such as bank loans and bonds Explain A security interest in one or more assets that lenders hold in exchange for secured debt financing
• Definition Less-developed countries (LDCs) Explain Also known as emerging markets. Countries who's per capita GDP is below a World Bank-determined level
• Definition Long-Term Anticipation Securities (LEAPS) Explain Long-term options
• Definition London Interbank Offered Rate (LIBOR) Explain international banks in London charge each other for borrowings. Many variable interest rates in the U.S. are based on spreads off LIBOR. By
• Definition London International Financial Futures Exchange (LIFFE) Explain A London exchange where Eurodollar futures as well as futures-style options are traded
• Definition Last in, first out Explain
• Definition Letter of credit (LOC) Explain by a bank on behalf of a borrower that assures the payment of interest and repayment of principal on bond issues
• Definition Loan-to-value ratio (LTV) Explain The ratio of money borrowed on a property to the property's fair market value
• Definition Liquid yield option note (LYON) Explain Zero-coupon, callable, putable, convertible bond developed by Merrill Lynch ; Co
• Definition Ladder strategy Explain A bond portfolio construction strategy that invests approximately equal amounts in every maturity within a given range
• Definition Lady Macbeth Strategy Explain Strategy in which a third party poses as a white knight in a takeover bid, and then joins forces with an unfriendly bidder
• Definition Laffer curve Explain A curve conjecturing that economic output will increase if marginal tax rates are cut. Named after economist Arthur Laffer
• Definition Lag Explain than is expected or required, as in lead and lag. Also, the number of periods that an independent variable in a regression model is held
• Definition Lag response of prepayments Explain between the time the weighted-average coupon of an MBS pool crosses the threshold for refinancing and observation of an acceleration in
• Definition Lagging indicators Explain than precede the country's overall pace of economic activity. See also: Leading indicators and coincident indicators
• Definition Laisse-faire Explain Doctrine that a government should not interfere with business and economic affairs
• Definition Lambda Explain price to a small change in the option volatility. It is the partial derivative of the option price with respect to the option volatility
• Definition Land contract Explain mortgage-holding seller finances a buyer by taking a down payment and subsequent payments in installments, but holds the title until the
• Definition Landlord Explain A property owner who rents property to a tenant
• Definition Lapsed option Explain An option that no longer has any value because it has reached its expiration date without being exercised

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Lapsed Option, Landlord, Land Contract, Lambda, Laisse-Faire, Lagging Indicators, Lag Response Of Prepayments, Lag, Laffer Curve, Lady Macbeth Strategy, Ladder

Lapsed Option, Landlord, Land Contract, Lambda, Laisse