Exchangeable Security Securities that enable the holder to rightfully carry out an exchange with it for common stock of a business distinct from the one issuing it. … [Read more...]
Excluded Commodity
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Excluded Commodity Commodity that cannot be impacted or manipulated. Includes many financial products and any events that are linked to the commodity but is beyond control of any party affected by the prices. … [Read more...]
Exclusionary Self-Tender
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Exclusionary Self-Tender The process by which a firm closes off a portion of stock owned by it from targeted stockholders by entering a tender for it. … [Read more...]
Execution
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Execution Completion of an order/ instruction to sell or purchase securities. Once executed, a Confirmation Report describes the trade. In U.S., settlement of cash/ commodity and ownership changeover occurs between 1 and 5 days after execution, varying according to type of … [Read more...]
Execution Costs
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Execution Costs Execution price of the security minus price that would have prevailed if trade did not take place. This can be further split into market timing costs and market impact costs. … [Read more...]
Exempt Securities
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Exempt Securities Those investment instruments that claim exemption from registration stipulations of the 1933 Securities Act or margin requirements outlined in the 1934 SEC Act. Includes government bonds, munis, agencies, private placements and commercial paper. … [Read more...]
Exercise
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Exercise Bringing into effect or implementing a right of an option holder to purchase (for a call option) or sell (for a put option) the security underlying the contract. … [Read more...]
Exercise Price
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Exercise Price Purchase or sale price of an underlying futures contract or options contract. … [Read more...]
Exercise Value
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Exercise Value The benefit beyond a current market trade afforded by an option that is in-the-money. … [Read more...]
Exercising the Option
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Exercising the Option Carrying out a buy or sell transaction on the option contract’s underlying asset. … [Read more...]
Exhaustion Gap
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Exhaustion Gap Gap that is witnessed after a quick rise in price of a stock begins to trail off. Usually shows the declining demand for the stock. … [Read more...]
Exogenous Variable
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Exogenous Variable Also termed parameter. Variables whose values are established externally and not in the model where they are used. … [Read more...]
Expectations Hypothesis Theories
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Expectations Hypothesis Theories Theories pertaining to the term structure of rates of interest that include pure expectations theory, preferred habitat theory and liquidity theory. These theories state that each forward rate is equal to the future interest rate expected for the … [Read more...]
Expectations Theory of Forward Exchange Rates
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Expectations Theory of Forward Exchange Rates Theory stating that the predicted future spot rate for foreign exchange T periods ahead in time and the prevailing T period forward exchange rate are equal. … [Read more...]
Expected Future Cash Flows
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Expected Future Cash Flows Future cash flows projected so as to enable investment decisions. … [Read more...]
Expected Future Return
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Expected Future Return Also termed expected return. Return expected to be generated in the future by an asset. … [Read more...]
Expected Return
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Expected Return Return that is expected from risky assets. The expectation is based on probability distributions for the potential return rates. Equals some zero risk rate (normally derived from Treasury note rate or bond rate) and a risk premium in addition, multiplied by the … [Read more...]
Expected Return on Investment
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Expected Return on Investment Refer: CAPM (capital asset pricing model). Return that can be expected to be earned on an investment. … [Read more...]
Expected Return-Beta Relationship
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Expected Return-Beta Relationship Capital Asset Pricing model implication that a security’s risk premiums and beta are in proportion. … [Read more...]
Expected Utility
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Expected Utility Refers to the utility that an entity or economy is expected to achieve under various circumstances. Calculated by considering the weighted average of all possible results under given circumstances, with weights being assigned by the probability, that any given event … [Read more...]
