Risk Glossary

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Damage to Physical Assets
Damage to Physical Assets under the Basel II Accord include operational risk events such as natural disasters, terrorism, vandalism.
Default
Default, the failure to pay interest or principal according to contractual terms, and occurs when a debtor is unable to make a timely payment.
Default
Default, the failure to pay interest or principal according to contractual terms, and occurs when a debtor or a counterparty is unable to make a timely payment or delivery.
Default Risk
Default risk is the potential loss due to default.
Delta
Delta is the ratio of the price change of the derivative to the price change of the underlying asset.
Deposit
A deposit is money entrusted to a bank for safekeeping in a bank account that allows the depositor to withdraw these funds and any interest paid by the bank on the deposit.
Deposit Insurance
Deposit insurance is a promise by a government or an insurance system that, in the event of a bank failure, bank depositors will receive their deposits with that bank either partly or fully.
Derivative
A (financial) derivative is an instrument whose value "derives" from the value of a related underlying financial asset or commodity , and includes swaps, options, forwards, and futures
Disclosure
Disclosure is the dissemination of information about the conditions of a business that allows for a proper and transparent evaluation of that business.
Discounted Dividend Model (DDM)
The Discounted Dividend Model estimates the value of a company based on the theory that the value of the company equals the sum of the discounted value of all its future dividend payments.
Dividend
A dividend is that part of the earnings of a corporation that are distributed to its owners. A dividend is a distribution to shareholders and typically entails the payment of cash or additional shares.
Duration
Duration is a measure of price sensitivity for a fixed income instrument and quantifies the sensitivity of the price of a fixed-income investment to a small incremental change in interest rates.

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