Serving Intelligent Investors
Xerxes
The sensitivity of Convexity to a change in yield.
The “Convexity” of Modified Duration
The third derivative of a financial instrument’s value with respect to its yield.
Hedging so that Xerxes equals zero is one step beyond Convexity hedging, which is itself one step beyond matching durations of one’s investment and (short) hedge portfolio. In theory, such a hedge would require relatively little rebalancing.
Find financial terms
Objective (mutual funds) The fund’s investment strategy category as stated in the prospectus. There are more than 20 standardized categories. Odd lot A trading order for less than 100 shares of stock. Odd lot dealer […]
Kamikaze Defense A kamikaze defense is a method for deterring a potential acquirer from purchasing a company. How it works: Kamikaze defense is named after the suicide attacks of Japanese pilots during World War II. […]
January Effect A recurring trend in the stock market during the month of January (mostly the first half of the month) wherein stock prices tend to go up. Jamming Executing a large sell (buy) order […]
