Financial Dictionary

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Y-Share

A class of mutual fund shares that often has a high minimum investment, such as $500,000 per lot, and the added benefit of waived or limited load charges and fees. Due to the high minimum investment required, Y-shares are often only accessible by large institutional investors.

Yacht Insurance

Insurance policy that provides indemnity liability coverage on pleasure boats. Yacht insurance includes liability for bodily injury or damage to the property of others and damage to personal property on the boat. Depending on the insurance provider, this insurance could also include gas delivery, towing and assistance if your boat gets stranded.

Yankee Bond

Bond denominated in U.S. dollars that is publicly issued in the U.S. by foreign banks and corporations. According to the Securities Act of 1933, these bonds must first be registered with the Securities and Exchange Commission (SEC) before they can be sold. Yankee bonds are often issued in tranches and each offering can be as […]

Yankee CD

Certificate of deposit (CD) that is issued in the United States by a branch or agency of a foreign bank. A Yankee CD is a foreign certificate of deposit denominated in U.S. dollars, issued in the U.S. to American investors. A foreign company can raise capital from U.S. investors by issuing Yankee CDs.

Yankee Certificate Of Deposit

Certificate of deposit issued by a foreign bank in the United States. As they usually have a minimum face value of $100,000, Yankee certificates of deposit are generally used by institutional and other large investors looking to invest funds in instruments with a relatively high degree of safety, although they are unsecured.

Year Over Year

Method of evaluating two or more measured events to compare the results at one time period with those from another time period (or series of time periods), on an annualized basis. Year-over-year comparisons are a popular way to evaluate the performance of investments. Any measurable events that recur annually can be compared on a year-over-year […]

Year-End Bonus

A reward paid to an employee at the end of the year. Many year-end bonuses are tied to performance metrics and the amount can vary depending whether certain milestones are met. Year-end bonuses are usually made up of lump-sum payments used to reward the individual for hard work and dedication.

Yearly Price Of Protection Method

Method used in actuarial analysis, which is often used in the insurance industry. The Yearly Price Of Protection Method is used to find out the cost of protection of a policy that includes a savings component such as a cash value life insurance policy. It relates to computations that involve insurance probability estimates.

Yearly Rate Of Return Method

More commonly referred to as annual percentage rate. It is the interest rate earned on a fund throughout an entire year. The yearly rate of return is calculated by taking the amount of money gained or lost at the end of the year and dividing it by the initial investment at the beginning of the […]

Yearly Renewable Group Term Insurance

A type of insurance policy purchased by employers to cover several people at a time and is reviewed on a yearly basis, which helps reduce premiums paid by the employer. Yearly renewable group term insurance range from $100,000 to $1 million in increments of $25,000. This insurance does not force possible policyholders to provide medical […]

Yearly Renewable Term

One-year term life insurance policy. This type of policy gives policy holders a quote for the year the coverage is bought. When you buy the yearly renewable term insurance policy, the premium you are quoted is for you at the given year that you request the quote. At this same time next year you will […]

Yearly Renewable Term Plan of Reinsurance

Type of life reinsurance where mortality risks are transferred to a reinsurer. In the yearly renewable term plan of reinsurance, the primary insurer (the ceding company) yields to a reinsurer its net amount at risk (the difference between the face value and the cash value of a life insurance policy) for the amount that is […]

Yellow Knight

Refers to a company that has made a takeover attempt, which finished as a merger proposal to a target company.

Yellow Sheets

These are daily US bulletin from the National Quotation Bureau that gives updated bid and ask prices for bonds traded over the counter. Yellow sheets also include a list of brokerages doing business on that market. Yellow sheets are primary source of information for brokers trading bonds over the counter.

Yemeni Rial

Official currency of the country of Yemen. The Yemeni Rial is divided into 100 fils, but the fil coins have not been issued since 1990 following Yemeni unification. However, beginning in 1993, the Central Bank of Yemen began introducing coins in one-, five-, 10- and 20-rial denominations.

Yen ETF

Exchange-traded funds that invest primarily in yen-backed assets such as short-term debt instruments and bonds, or hold the currency in simple interest-bearing accounts that pay the current money market yields in Japan. Some Yen ETFs will match the current income earned on the yen assets, or may use that income to pay the expenses of […]

Yield

In finance in general, yield is the rate of annual return for an investment, expressed as a percentage. When referring to stocks, yield is a rate of income generated from the security, obtained in the form of dividend and expressed as percentage. Yield is calculated by dividing annual dividend payments by stock’s current share price. […]

Yield Advantage

Relationship between convertible securities and the dividend yield of the common stock of the same issuing corporation. The yield advantage is the additional amount of return an investor can expect to earn if a convertible security is purchased instead of the common stock.

Yield Based Option

Type of debt-instrument-based option that derives its value from the difference between the exercise price and the value of the yield of the underlying debt instrument. Yield-based options are settled in cash. A yield-based call buyer expects interest rates to go up, while a yield-based put buyer expects interest rates to go down.

Yield Basis

Method of quoting the price of a fixed-income security as a yield percentage, rather than in dollars. This allows bonds with varying characteristics to be easily compared.

Yield Burning

Illegal practice of underwriters marking up the prices on bonds for the purpose of reducing the yield on the bond. This practice, referred to as “burning the yield,” is done after the bond is placed in escrow for an investor who is awaiting repayment.

Yield Curve

A graphical representation of interest rates of all bonds with same credit quality but with different maturities. Yield is presented on the vertical axis while maturity dates are presented on the horizontal axis, which gives you a term structure of interest rates. Yield curve usually compares interest rates on 3 months, 2 years, 5 years […]

Yield Curve Risk

The risk of experiencing an adverse shift in market interest rates associated with investing in a fixed income instrument. The risk is associated with either a flattening or steepening of the yield curve, which is a result of changing yields among comparable bonds with different maturities. When market yields change, this will impact the price […]

Yield Elbow

The point on the yield curve that shows the year in which the interest rates hits the highest point. It is the peak of the yield curve.

Yield Equivalence

A ratio that shows how high interest rate on a taxable investment would have to be in order to match returns of tax-exempt investments like municipal bonds. Yield equivalence is calculated by the following equation: Tax exempt yield / (1- tax rate) By dividing yield on a tax-exempt investment by 1 – tax rate, you […]