American option

An option that can be exercised on or any time before the date of expiry.

Amortization

Process of full payment of debt in installments of principal and earned interest over a definite time.

Amount at risk

Balance of the sum payable not covered by reserves, potentially falling on the net worth (net assets) of the company.

Annuity

Fixed amount of cash to be received every year for a specified period of time.

Arbitrage

Simultaneous purchase and sale of identical or equivalent financial instruments or commodity futures so as to benefit from difference in their price relationship.

Asset/Liability Risk:

A risk that current obligations/liabilities cannot be met with current assets. A fundamental risk in all organizations, which should manage the risk and maintain liquidity or become insolvent.

Assets

Things that one owns which have value in financial terms.

Assignment

Receipt of an exercise notice by an option writer (seller) that obligates him to sell (in the case of a call) or purchase (in the case of a put) the underlying security at the specified strike price.

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