Business / Finance Glossary

Leverage Rebalancing: Making transactions to adjust (rebalance) a firm's leverage ratio to a target ratio.

Leveraged Beta: The beta of a leveraged required return; that is, the beta as adjusted for the degree of leverage in the firm's capital structure.

Leveraged Buyout (LBO): A transaction used to take a public corporation private that is financed through debt such as bank loans and bonds. Because of the large amount of debt relative to equity in the new corporat . . . View Full Definition

Leveraged Company: A company that has debt in its capital structure.

Leveraged Equity: Stock in a firm that relies on financial leverage. Holders of leveraged equity experience the benefits and costs of using debt.

Leveraged Investment Company: An investment company or mutual fund entitled to borrow capital for its operations. Also, an investment company that issues both income shares and capital shares.

Leveraged Lease: A lease arrangement under which the 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 payments to sec . . . View Full Definition

Leveraged Portfolio: A portfolio that includes risky assets purchased with funds borrowed.

Leveraged Recapitalization: Often used in risk arbitrage. A public company takes on significant additional debt with the purpose of either paying an extraordinary dividend or repurchasing shares, leaving the public sha . . . View Full Definition

Leveraged Required Return: The required return on an investment when the investment is financed partially by debt.

Leveraged Stock: Stocks financed with credit, such as that purchased on a margin account.

Liabilities: Obligations used to fund the operations of a business, including bank loans, accounts payable, and accrued expenses.

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.

Liability Funding Strategies: Investment strategies that select assets so that cash flows will equal or exceed the client's obligations.

Liability Insurance: Insurance guarding against damage or loss that the policyholder, may cause another person in the form of bodily injury or property damage.

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.

LIBOR: See London Interbank Offered Rate.

Lien: A security interest in one or more assets that lenders hold in exchange for secured debt financing.

Life Annuity: An annuity that pays a fixed amount for the lifetime of the annuitant.

Life Cycle: The lifetime of a product or business, from its creation to its demise or transformation.

Life Expectancy: The length of time that an average person is expected to live, which is used by insurance companies use to make projections of benefit payouts.

Life Insurance: An insurance policy that pays a monetary benefit to the insured person's survivors after death.

Life Insurance In Force: The dollar amount of life insurance that a company has issued, measured as the sum of policy face values and dividends paid.

Life Insurance Policy: The contract that sets out the terms of life insurance coverage.

Lifetime Reverse Mortgage: A type of mortgage in which a homeowner borrows against the value a home, while retaining title, and making no payments while residing in the home. When the owner ceases living in the house, . . . View Full Definition

Page: 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 113 114 115 116 117 118 119 120 121 122 123 124 125 126 127 128 129 130 131 132 133 134 135 136 137 138 139 140 141 142 143 144 145 146 147 148 149 150 151 152 153 154 155 156 157 158 159 160 161 162 163 164 165 166 167 168 169 170 171 172 173 174 175 176 177 178 179 180 181 182 183 184 185 186 187 188 189 190 191 192 193 194 195 196 197 198 199 200 201 202 203 204 205 206 207 208 209 210 211 212 213 214 215 216 217 218 219 220 221 222 223 224 225 226