A situation in which the party with hidden information chooses to deal when the other side loses. Lenders face it when the riskiest borrowers are keenest to borrow. Where it appears →
Alpha
The return earned above what the asset's exposure to risk factors would predict. It is the measure of a manager's added value. Where it appears →
Arbitrage
A strategy that makes a riskless profit with no net investment. Pricing relationships are derived on the basis that it cannot persist. Where it appears →
Asset-liability management
Managing the structure of assets and liabilities to control interest rate, liquidity and funding risk. It looks at gaps by maturity. Where it appears →
Autocorrelation
The correlation of a series with its own past values. Positive autocorrelation makes volatility scale faster than the square root of time. Where it appears →
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