- X -
- Law of One Price
- The rule stipulating that equivalent
securities or bundles of securities must sell at equal prices to
preclude arbitrage opportunities.
- Leading Economic Indicators
- Economic series that tend to
rise or fall in advance of the rest of the economy.
- Leverage Ratio
- Ratio of debt to total capitalization of
- The last‐in first‐out accounting method of valuing inventories.
- Limit Order
- An order specifying a price at which an investor
is willing to buy or sell a security.
- Limited Liability
- The fact that shareholders have no personal
liability to the creditors of the corporation in the event of
- Liquidation Value
- Net amount that could be realized by
selling the assets of a firm after paying the debt.
- Liquidity refers to the speed and ease with which
an asset can be converted to cash.
- Liquidity Preference Theory
- Theory that the forward rate
exceeds expected future interest rates.
- Liquidity Premium
- Forward rate minus expected future
short interest rate.
- Sales charge on the purchase of some mutual
- Load Fund
- A mutual fund with a sales commission,
- Lock-up Period
- Period in which investors cannot redeem
investments in the hedge fund.
- Lognormal Distribution
- The log of the variable has a normal
- London Interbank Offered Rate (LIBOR)
- Rate that most
creditworthy banks charge one another for large loans of
Eurodollars in the London market.
- Long Position Hedge
- Hedging the future cost of a purchase
by taking a long futures position to protect against changes
in the price of the asset.
- Lower Partial Standard Deviation
- Standard deviation
computed using only the portion of the probability
distribution below the mean of the variable.